The UAE non-oil private sector recorded its strongest growth in seven months during September, reflecting renewed business confidence and robust domestic demand. The S&P Global UAE Purchasing Managers’ Index (PMI) rose to 54.2 from 53.3 in August, signaling a solid improvement in operating conditions across the non-oil economy. Any reading above 50 indicates expansion, underscoring positive momentum in key sectors.
Stronger new business orders fueled the latest upturn. Companies reported faster growth in new sales, supported mainly by a rebound in local demand. Although foreign sales improved slightly, domestic clients drove most of the activity. Analysts noted that firms benefited from increased consumer spending and a steady recovery in services and construction.
David Owen, Senior Economist at S&P Global Market Intelligence, said the September reading marked a recovery after mid-year moderation. He explained that the UAE non-oil sector regained strength following a slowdown earlier in 2025. Owen highlighted that over 30 percent of surveyed businesses saw higher order volumes, showing rising confidence among customers.
Employment levels also improved, with hiring growing at the fastest pace since May. Many firms expanded their workforce to meet higher output requirements, reflecting stronger expectations for the final quarter of the year. However, some companies relied on existing inventory to fulfill orders, leading to a third monthly decline in stock levels.
Despite healthy demand, competitive market pressures limited the ability of firms to raise prices. Businesses were cautious about passing higher costs to customers, keeping price increases minimal. Rising input costs, especially in logistics and raw materials, added pressure on profit margins. Still, companies prioritized maintaining market share over aggressive price hikes.
Owen noted that competition continues to shape business strategies in the UAE non-oil market. He said firms remain careful with purchasing and pricing decisions, even as overall performance improves. Backlogs of work rose slightly, though at one of the slowest rates since early last year.
Economists believe the latest PMI results confirm the resilience of the UAE’s diversification efforts. The non-oil sector remains a vital engine of growth as the country reduces dependence on hydrocarbons. Analysts expect continued improvement through late 2025, supported by tourism recovery, infrastructure investment, and strong domestic consumption.
The upbeat September figures reinforce the UAE’s position as one of the region’s most dynamic and diversified economies. With business confidence rising, policymakers view the results as a sign of sustained economic stability heading into the next quarter.
