Today's Edition
A.SREENIVASA REDDY (ABU DHABI)
The non-oil private sector of the UAE’s economy continued its robust expansion in February with the seasonally-adjusted S&P Global UAE Purchasing Managers’ Index (PMI) remaining at 55.0, higher than its long-run average of 54.4.
PMI is an economic indicator that measures the business activity in the manufacturing and services sectors. It is based on surveys of company executives and reflects trends in new orders, production, employment, supplier deliveries, and inventory levels. A PMI above 50 indicates expansion, while below 50 signals contraction.
The latest PMI survey data reaffirms strong growth in the UAE’s non-oil economy in the second month of 2025. “The pace of growth remained close to December's nine-month high, driven by a notable rise in new business that fuelled a substantial upturn in output,” the S&P Global PMI report said.
Business activity growth gained momentum and was stronger than its historical trend in February. According to monitored firms, output was ramped up in response to rising levels of new business. “Around 29% of the survey panel reported higher activity than in January,” the S&P Global said.
David Owen, Senior Economist at S&P Global Market Intelligence, said: "February proved to be another solid month for UAE non-oil businesses, with the latest survey data indicating further strong upturns in new orders and output. A PMI reading of 55.0 suggests that growth has remained relatively steady since its recent high at the end of last year.”
Improved market conditions, advertising efforts and restrained output price pressures boosted demand levels in February. “Order book volumes rose at a sharp pace, despite losing momentum since January,” the S&P report said.
Order book growth led to an increase in input purchases midway through the first quarter. “Inventories of inputs were also raised, and to the greatest degree in just over a year,” the PMI report said.
The accumulation of new work contributed to another significant rise in the volume of unfinished business, with this increase only slightly weaker than January's eight-month high.
Approximately 10% of surveyed firms anticipate increased activity over the next 12 months. Sentiment remained positive and even showed a slight improvement from January’s recent low.
Input costs in the non-oil sector rose at a quicker pace in February, the report noted, marking the first acceleration in inflation since July 2024. Many companies reported the passing on of higher material prices by suppliers, as well as increased costs for maintenance and technology.
Despite some efforts to remain price competitive, non-oil companies raised their output charges for the second successive month. The latest increase was modest, but also the strongest since September last year
Dubai PMI
Dubai’s non-oil private sector saw a slower pace of improvement in February, with the headline PMI registering 54.3, down from 55.3. However, the S&P report emphasised that overall improvement remained solid, driven by robust expansions in new orders and output.
Activity levels at non-oil companies increased due to stronger demand and softer price pressures. “The rate of increase in input prices was the softest recorded in four months,” the S&P report said.
Business expectations recovered to a three-month high but remained relatively subdued. “As a result, most firms kept their staffing levels unchanged from January, although inventory growth was supported by rising input purchasing,” the PMI report noted.
