UAE business activity rises to seven-month high as new orders surge

Dubai: The UAE’s non-oil private sector recorded its strongest performance in seven months in September, driven by faster growth in new business and steady expansion in output, according to the latest S&P Global UAE Purchasing Managers’ Index (PMI).

The seasonally adjusted PMI rose to 54.2, up from 53.3 in August, signalling a solid improvement in operating conditions across the non-oil economy. Any reading above 50 indicates expansion.

The latest data showed a sharp rebound in new business, which climbed at the fastest pace since February. The upturn was mainly supported by stronger domestic demand, although foreign sales also picked up slightly.

“The UAE PMI made up some lost ground in September following a trend of moderating growth in the middle of the year,” said David Owen, Senior Economist at S&P Global Market Intelligence.

“Indeed, the latest reading of 54.2, which sits just below the survey’s long-run average, suggests that non-oil business performance has recovered well since its trough in July.”

Owen noted that over 30% of firms surveyed reported higher new order volumes during the month, signalling a clear improvement in client activity. “The uplift pointed to some positive momentum in the domestic market as export sales growth remained relatively muted,” he added.

Rising demand encouraged companies to expand output and hiring. Employment increased at the fastest rate since May, though only modestly. Firms also relied on existing stocks to meet orders, leading to a third consecutive monthly decline in inventories.

Despite solid demand, competitive pressures continued to weigh on pricing. Companies showed reluctance to raise charges, limiting the pass-through of higher input costs.

“Competitive pressures were again noted as a key issue, with several panellists linking this to caution around purchasing and pricing decisions,” said Owen. “Backlogs also rose, although the latest uptick was among the slowest recorded since the start of last year.”

The Dubai PMI also improved to 54.2 in September, up from 53.6 in August, mirroring the national performance.
Non-oil firms in Dubai reported a stronger rise in new work, an uptick in employment, and greater business optimism heading into the final quarter of the year.

Input cost pressures in Dubai reached a five-month high, but businesses cut selling prices for the first time since November 2024, highlighting intense competition across key industries.

Surveyed companies across the UAE expressed continued optimism about future business activity, supported by government initiatives, new projects, and strong domestic demand.

The PMI report suggests the UAE’s non-oil sector is regaining momentum after a mid-year slowdown, with rising sales and hiring pointing to renewed business confidence heading into the final quarter of 2025.