Today's Edition
A. SREENIVASA REDDY (ABU DHABI)
The UAE’s non-oil private sector recorded a strong start to 2026, with the seasonally adjusted S&P Global UAE Purchasing Managers’ Index (PMI) rising to 54.9 in January, up from 54.2 in December, signalling a rapid expansion in business activity.
The PMI, a key indicator tracking conditions across the manufacturing and services sectors, pointed to solid growth in activity levels during the month. A PMI reading above 50 indicates an expansion in economic activity.
“UAE non-oil companies enjoyed a rapid increase in business at the start of 2026, marking the fastest growth in nearly two years,” the S&P report said. It added that output expectations strengthened, supporting a steep increase in purchasing activity.
Survey respondents indicated that rising inflows of new business were a key driver of higher activity, while some firms pointed to improving economic conditions, particularly in sectors such as real estate and technology.
The PMI survey recorded a sharp rise in the volume of new orders received by non-oil firms. “The uplift was the fastest recorded in 22 months, demonstrating a solid turnaround in the pace of growth since the middle of last year,” the report said, adding that the increase in domestic demand was more pronounced than that seen in international orders.
At the same time, input prices rose at the fastest rate in one and a half years. “The survey data signalled that rising demand for raw items, as firms attempted to build up inventories, led to a solid uplift in purchase prices,” the report noted.
January data also indicated the sharpest increase in input buying across the non-oil sector in six-and-a-half years, as companies sought to shore up inventories amid strengthening order books. The report said firms were able to expand inventories thanks to improved supplier performance, marked by a sharp reduction in delivery times.
“Higher inventories, improving supply chains and fewer reports of administrative delays combined to restrict backlog growth in January,” the report said.
Looking ahead, non-oil firms expressed greater optimism about future business conditions. “Business expectations improved to the highest level in 15 months, as panellists widely predicted further improvements in demand conditions, as well as expansion efforts,” the report said.
Commenting on the data, David Owen, Senior Economist at S&P Global Market Intelligence, said, “The UAE's 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.” He added that “stock levels were also boosted as lead times decreased rapidly, allowing companies to reduce some of the strain on business capacity.”
Dubai PMI
Dubai’s non-oil economy hit a 22-month high, the S&P report said without disclosing the definitive PMI number for the emirate separately.
“Businesses in Dubai's non-oil private sector saw operating conditions strengthen markedly as 2026 commenced, as client spending improved and confidence grew,” the report noted. The rate of sales growth accelerated to its fastest pace since March 2024.
On the outlook, firms’ assessments of future activity improved to a four-month high, as businesses projected further increases in client demand. The report also flagged a rise in input prices in Dubai, which increased at the steepest rate in one-and-a-half years.
