UAE non-oil demand drops again, showing signs of a cooling economy. In March, the country’s non-oil private sector grew slower. The S&P Global PMI index fell to 54 from February’s 55. This still shows growth, but at a weaker pace.
Input purchases by firms increased the most since mid-2019. Still, the overall business growth remained soft. The current upturn is the weakest recorded since September last year. At the same time, UAE non-oil demand drops again, creating challenges for local companies.
Many businesses raised selling prices in March. This was the second-fastest increase in over seven years. Firms acted to protect profit margins. Despite this, input cost pressure remained moderate. Some companies reported a drop in transport costs, while others faced higher material prices.
Sales continued to rise across the non-oil economy. However, strong competition limited growth in export orders. The increase in overall sales was the weakest since October 2024. With weaker demand, companies found it harder to meet sales targets.
Capacity pressures eased slightly, but many firms still had rising backlogs. To fix this, companies bought large amounts of supplies. They wanted to reduce delays and prepare for future orders. UAE non-oil demand drops again, pushing firms to act fast and rethink strategies.
Some companies also struggled with late payments from clients. Officials expect that the UAE’s new e-invoicing system could help fix this issue. Meanwhile, salary costs went up again in March, driven by rising living costs.
Hiring remained a key concern. Employment rose, but at the slowest pace in nearly three years. Some firms had trouble finding qualified staff, even with higher demand.
Dubai’s non-oil sector also slowed. Its PMI dropped to 53.2 in March, down from 54.3 in February. The growth rate weakened for the third month in a row. Businesses cut back on hiring as new orders slowed. Input prices dropped to a one-year low, while output prices rose faster than in February.
UAE non-oil demand drops again, signaling that firms must adapt to new challenges and tighter conditions.
