The S&P Global UAE Purchasing Managers’ Index climbed to 54.9 in January from 54.2 the previous month, marking the strongest reading in 11 months and confirming an expansion in the non-oil private sector where readings above 50 indicate growth. New orders increased sharply while business activity gained momentum, with firms citing stimulated demand in real estate and technology as key drivers. The survey highlighted that output expectations had also risen, supporting broader gains across the non-oil economy that has been central to the UAE’s diversification strategy.
Sales volumes recorded their fastest increase in 22 months, reflecting a solid turnaround since mid-2025 and driven primarily by rising domestic client demand along with positive responses to new products and services. International orders grew more modestly by comparison, according to the S&P Global assessment. David Owen, senior economist at S&P Global Market Intelligence, said the 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.
Purchasing activity expanded at the sharpest rate in six and a half years as companies stockpiled materials to meet rising order books, the January survey found. Lead times shortened rapidly, which eased capacity pressures and allowed businesses to build inventories. Optimism about future output improved to its highest level in 15 months, with most respondents forecasting further demand gains and expansion initiatives.
The UAE Central Bank estimated that the economy grew 5 percent in 2025, with the non-oil sector expanding 4.9 percent and hydrocarbons 5.4 percent after faster-than-expected reversal of oil production cuts. Growth is projected to accelerate to 5.2 percent in 2026, supported by stronger performance in both segments. S&P Global data later showed the PMI moderating, falling to 50.8 in June 2026, its lowest since February 2021, as geopolitical tensions and competition weighed on momentum.
In Dubai, the non-oil private sector PMI also reached a 22-month high in January, with sales growth accelerating to the quickest pace since March 2024 on improved client spending and economic confidence. Employment rose amid renewed stockpiling efforts while assessments of future activity strengthened to a four-month high. Businesses projected additional increases in client demand, according to the survey.
Some respondents noted that competitive pressures, shifts in trade patterns and higher costs had weighed on output despite the overall gains. Non-oil companies tightened price margins in response to competition, resulting in only a marginal increase in average charges. The UAE has invested heavily in technology, manufacturing and tourism to reduce reliance on hydrocarbons, a push that has aligned with the non-oil sector’s contribution to recent growth.
