Today's Edition
BATOOL GHAITH (ABU DHABI)
The UAE’s non-oil economy is expected to gain further momentum in the third quarter of 2026, supported by strong domestic consumption, investment and improving regional trade flows as geopolitical tensions ease, according to Standard Chartered.
The bank’s latest economic analysis forecasts stronger business activity in the months ahead, with infrastructure, logistics, technology and tourism among the sectors expected to benefit as regional conditions continue to stabilise.
The report said the UAE’s June S&P Global Purchasing Managers’ Index (PMI) remained above the 50 threshold, signalling continued expansion in non-oil activity even during the recent period of regional conflict.
Rola Abu Manneh, Chief Executive Officer for the UAE, Middle East and Pakistan at Standard Chartered, said the latest PMI reading reinforces the resilience of the UAE’s non-oil economy and private sector activity during a period of regional uncertainty.
“Domestic consumption and investment continue to support growth, while the gradual recovery in external demand provides a more constructive outlook for the third quarter,” she said.
She added that the trends reflect the strength of the UAE’s economic fundamentals and its continued position as a leading regional hub for trade, investment and capital flows.
Speaking to Aletihad, Abu Manneh said infrastructure, services and other sectors linked to public investment are expected to lead non-oil growth during the third quarter.
“The June PMI itself pointed to construction projects, digital services and confirmed contract pipelines as the clearest pockets of strength,” she said.
She added that logistics, tourism and other externally facing sectors are expected to recover more gradually as regional trade and travel conditions continue to normalise.
“The main opportunities are likely to emerge where domestic investment and improving trade conditions intersect — in infrastructure, logistics, warehousing, technology and selected tourism-related services,” Abu Manneh added.
According to Standard Chartered, stronger business activity in the third quarter is likely to be supported by three factors: softer oil prices, a recovery in the jobs market, and faster investment growth as governments across the region continue to diversify trade corridors.
On employment, Abu Manneh told Aletihad that hiring is expected to recover first in construction, logistics, tourism, and project-linked services.
The bank’s analysis also noted that the partial reopening of the Strait of Hormuz, combined with the earlier rerouting of oil exports, has already resulted in a near full recovery in the UAE’s oil exports, while oil exports across the wider region are recovering at a more gradual pace.
