UAE non-oil growth hits fastest pace since 2024, but hiring slips

Dubai, United Arab Emirates - The UAE's non-oil sector experienced its fastest pace of growth since December 2024 in August, driven by heightened customer demand, robust exports, and fewer supply disruptions, though businesses remained cautious about increasing staff. The S&P Global UAE Purchasing Managers' Index climbed to 55.3 in August from 52.7 in July, indicating a second consecutive month of accelerating growth in the non-oil private sector.

New business surged at the joint-fastest rate in over two years, with output growth hitting a six-month high. Customer activity improved, and export orders expanded for a second month in a row following declines in the second quarter. However, despite strong sales, hiring declined for the second consecutive month, as companies remained uncertain about the economic impact of the Middle East conflict.

Employment declined for the second time in three months, with firms unable to match the pace of new orders, leading to a rapid increase in unfinished work. To mitigate supply chain disruptions, UAE businesses increased purchasing activity and built inventories at the fastest rate in nearly three years, turning to local suppliers to reduce sourcing problems and improve delivery times.

The move contributed to shorter delivery times and stronger purchasing, while the accumulation of inventories aimed to prepare for demand and limit exposure to potential future supply disruptions.