Today's Edition
A. SREENIVASA REDDY (ABU DHABI)
The UAE’s non-oil private sector continued to record a solid expansion in December, with the seasonally adjusted S&P Global UAE Purchasing Managers’ Index (PMI) standing at 54.2, slightly lower than the nine-month high of 54.8 recorded in November.
The PMI, a key indicator tracking business activity across the manufacturing and services sectors, pointed to strong growth in activity levels during December. Firms cited new customer orders, strengthening market conditions and supportive domestic policies as key drivers of growth, according to the S&P Global PMI report.
The index remained closely aligned with its long-term average of 54.3, signalling a robust improvement in the health of the non-oil economy. A PMI reading above 50 indicates an expansion in economic activity.
The pace of expansion in non-oil activity was among the fastest recorded during the year. More than a quarter of surveyed companies (27%) reported month-on-month increases in output, while fewer than 7% noted a decline.
“The UAE non-oil sector concluded 2025 with a solid upturn, marking a year of robust but somewhat tempered growth in business conditions. The PMI averaged 54.0 over the year, which was close to its long-run average,” said David Owen, Senior Economist at S&P Global Market Intelligence.
“Firms finished the year with two of its best months of activity growth, as the survey data suggested that sales were rising much faster compared to its low point in August,” Owen said, adding that companies took encouragement from increased customer spending, rising tourism, greater technology adoption and supportive government policies.
The report noted that “some companies reported subdued sales figures, citing intensifying competition and ongoing economic uncertainty as key challenges.”
The PMI report also highlighted mounting cost pressures in December, with survey data pointing to the fastest rise in overall input prices in 15 months. Firms reported above-average increases in salary expenses, along with higher transport and maintenance costs. In response, selling prices were raised for the sixth consecutive month, although the increase remained modest.
Firms also reported a notable decline in stock levels. “Inventory levels fell at the second-steepest rate in the series history, surpassed only by May 2025,” the report said.
Employment growth remained relatively subdued towards the end of the fourth quarter. Job creation was marginal and weaker than in the previous month. “The subdued rate of hiring contributed to a sharper build-up in backlogs of work in December,” the report noted.
Looking ahead to 2026, business expectations remained broadly positive, with survey participants expressing optimism about demand growth and business investment.
Dubai PMI
Dubai’s non-oil economy also ended the year on a strong note. “Non-oil companies across Dubai enjoyed another solid improvement in operating conditions in the final month of 2025. Output levels increased at the sharpest rate since March 2024,” the report said.
The headline PMI eased to 54.3 in December from 54.5 in October and November.
Despite only a marginal rise in employment and a further decline in input stocks, firms were able to expand activity levels. The report also pointed to rising input costs and a corresponding increase in output prices.
