The UAE’s non-oil private sector recorded its strongest improvement in business conditions since December 2024 in August, supported by stronger demand, rising output and easing cost pressures, according to the latest S&P Global survey.
The seasonally adjusted S&P Global UAE Purchasing Managers’ Index rose to 55.3 in August from 52.7 in July. The increase marked the second consecutive month of faster growth. A reading above 50 indicates an improvement in business conditions.
New business expanded at its joint-fastest pace in more than two years, with companies reporting stronger customer activity and reduced economic caution. Export demand also improved for a second consecutive month after declining throughout the second quarter.
Business activity increased at its fastest rate in six months as companies benefited from stronger order books and progress on projects. Firms also pointed to growing demand for digital services and fewer logistics difficulties as factors supporting output.
David Owen, principal economist at S&P Global Market Intelligence, said the UAE’s non-oil economy had “shifted decisively into a higher gear.” He said stronger demand was being matched by faster deliveries and lower cost pressures.
Companies also showed greater interest in sourcing supplies locally as businesses sought to strengthen supply chains and reduce exposure to geopolitical disruptions.
According to S&P Global, greater use of domestic suppliers helped shorten delivery times and encouraged companies to increase purchasing activity. Businesses accumulated inventories at the fastest pace in almost three years, suggesting greater confidence about future demand while also allowing firms to prepare for potential supply disruptions.
Supply conditions improved during the month, contributing to a decline in input cost inflation. The rate of cost growth fell to its lowest level since February, despite businesses reporting higher expenses for energy, fuel, cement, steel and chemicals.
The stronger performance was also visible in Dubai, where the non-oil private sector recorded faster growth in August.
Dubai’s PMI increased to 54.1 from 51.7 in July. Businesses reported stronger client spending and improved export trade, while output and new orders both expanded at their fastest rates in six months.
Business confidence across the UAE also improved. Expectations for activity over the coming year reached their highest level since April, supported by stronger sales trends, construction projects and hopes that regional tensions will ease.
The August figures point to a broader strengthening in the UAE’s non-oil economy, with demand, production and supply conditions all showing improvement as companies enter the final months of the year.
