A. SREENIVASA REDDY (ABU DHABI)

The UAE non-oil private sector continued to expand in March, demonstrating resilience despite the uncertain geopolitical situation in the region.

The seasonally adjusted S&P Global UAE Purchasing Managers’ Index (PMI) stood at 52.9, remaining firmly above the 50 threshold that signals expansion in economic activity, although easing from 55.0 in February.

Overall sales growth remained positive, though it moderated compared to the previous month. The report noted that the closure of supply routes and softer demand conditions had weighed on output growth.

“An overall solid expansion was still recorded, with many businesses reporting resilient sales pipelines and uninterrupted project work,” the S&P Global report said.

New business inflows continued to rise in March, albeit at a slower pace. While many firms reported robust client demand, others cited supply-chain shortages, higher freight costs and broader uncertainty as factors affecting growth.

Inventories declined for the first time in three months, as supply constraints led some companies to utilise existing stock to fulfil orders. At the same time, businesses raised selling prices to offset rising cost pressures, with the increase in charges among the sharpest seen in recent years.

Firms remained broadly positive about the outlook, supported by long-term expansion strategies and government spending on key domestic projects, although overall confidence moderated amid ongoing regional developments.

Commenting on the data, David Owen, Senior Economist at S&P Global Market Intelligence, said that order books remained resilient and output continued to expand despite the challenging backdrop.

“Anecdotal comments suggested that sectors such as tourism, retail and logistics were more affected, whereas segments such as technology and construction signalled a softer, but still notable impact,” Owen said.

Dubai’s non-oil private sector also remained in expansion territory, with the PMI recorded at 53.2 in March, down from 54.6 in February, but still indicating solid growth conditions.