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The UAE’s non-oil private sector recorded its sharpest growth in nearly two years in January, supported by a surge in new orders and improving economic conditions.
The seasonally adjusted S&P Global UAE Purchasing Managers’ Index (PMI) rose to 54.9 in January from 54.2 in December, its highest in 11 months.
“UAE’s non-oil economy started the year on a solid footing, as new orders increased steeply, prompting firms to lift output and sharply expand their purchases,” said David Owen, Senior Economist at S&P Global Market Intelligence.
The increase in new order volumes was the fastest in 22 months, driven by stronger domestic demand and positive responses to new products and services. In contrast, new export orders recorded only a modest rise.
However, firms also reported weaker output due to rising competitive pressures, shifting trade patterns and higher costs.
A sharp rise in purchasing activity, the largest in six-and-a-half years, contributed to 18‑month‑high input cost inflation, with businesses facing higher prices across multiple materials. Selling prices were largely unchanged, suggesting firms absorbed rising costs to stay competitive.
Companies were able to restock more quickly as delivery times improved. Capacity pressures also eased slightly as employment continued to rise, albeit marginally.
Business expectations reached a 15‑month high, supported by confidence in improving demand conditions.
Dubai sees growth
Dubai’s non-oil private sector saw new business growth climb to a two-month high as operating conditions strengthened and client spending increased.
The stronger business environment led to faster employment growth and renewed stockpiling. While overall activity growth eased slightly from December, it remained robust. Business confidence also improved, reaching a four‑month high on expectations of stronger demand.
However, firms faced faster input cost inflation, which rose to its highest level in a year and a half.
(Writing by Brinda Darasha; editing by Seban Scaria)
