S&P Global Market Intelligence reported that business activity across the UAE’s non-oil private sector strengthened in February 2026 to its fastest pace in 12 months. The composite Purchasing Managers’ Index edged up to 55.0 from 54.9 in January, signalling solid expansion as output growth accelerated to its quickest rate since April 2024. David Owen, senior economist at S&P Global Market Intelligence, noted that output increased rapidly in response to strong inflows of new work.[[1]](https://gulfnews.com/business/economy/uae-non-oil-business-growth-reaches-a-one-year-high-on-strong-demand-1.500462955)
According to the February survey, companies experienced a steep rise in new orders fuelled by tourism growth, expanding e-commerce channels and interest in artificial intelligence-related products along with targeted marketing and contract wins. International demand added only modestly while the bulk of sales growth came from the domestic market. The surge created capacity pressures that produced a sharp build-up in backlogs of unfinished work due to administrative delays on shipments and projects.
Businesses responded to the increased workload by expanding employment at the strongest rate since November 2025, the data showed. Firms rebuilt inventories of purchased inputs for a second consecutive month after supplier delivery times improved markedly and vendors displayed greater flexibility. Owen stated that firms faced relatively little friction when it came to input supply chains with lead times improving rapidly, putting companies in a better position to meet client demand.[[1]](https://gulfnews.com/business/economy/uae-non-oil-business-growth-reaches-a-one-year-high-on-strong-demand-1.500462955)
S&P Global figures indicated that input cost inflation eased during February to its slowest pace since October 2025, offering relief after an earlier spike largely attributed to falling fuel prices even as some raw material costs rose. Selling prices increased for an eighth straight month although the rate of charge inflation stayed modest amid competitive pressures. Owen added that the slowing of input cost inflation helped soothe concerns after the previous month’s spike.[[1]](https://gulfnews.com/business/economy/uae-non-oil-business-growth-reaches-a-one-year-high-on-strong-demand-1.500462955)
The same survey showed Dubai’s non-oil private sector maintained solid growth in February although the headline PMI eased to 54.6 from 55.9 in January. Employment across the emirate rose at the fastest pace in two years while input cost pressures moderated to a seven-month low. Businesses in Dubai continued to cite new opportunities linked to tourism, population growth, marketing initiatives and artificial intelligence technologies.[[1]](https://gulfnews.com/business/economy/uae-non-oil-business-growth-reaches-a-one-year-high-on-strong-demand-1.500462955)
A Reuters report placed expected UAE non-hydrocarbon GDP growth at 4.8 percent for 2026 while the non-oil sector accounted for more than three-quarters of overall output in recent assessments.[[2]](https://www.reuters.com/world/middle-east/uae-non-oil-private-sector-growth-rebounds-september-pmi-shows-2025-10-03/) The February PMI performance therefore represented a positive start to the year for an economy that IMF projections show continuing its diversification trajectory. Subsequent S&P Global releases indicated some moderation in non-oil momentum by June as regional geopolitical tensions and supply disruptions weighed on activity.[[3]](https://tradingeconomics.com/united-arab-emirates/manufacturing-pmi)
