Strong demand and increased business activity drove growth in the UAE’s non-oil private sector to its fastest pace in nine months in December, a survey by S&P Global showed on Monday.
The seasonally adjusted S&P Global UAE Purchasing Managers’ Index (PMI) rose to 55.4 in December from 54.2 in November, marking a third consecutive monthly increase and remaining above the 50.0 threshold that separates expansion from contraction.
The survey pointed to a sharp rise in new business, with the new orders subindex climbing to 59.3 from 58.0, signalling robust demand. However, export demand growth weakened, with that subindex hitting a seven-month low.
Capacity constraints and hiring challenges
Backlogs continued to accumulate rapidly, indicating pressure on capacity.
“Capacity levels remain under considerable stress, illustrated by another marked increase in backlogs of work,” said David Owen, senior economist at S&P Global Market Intelligence.
“While margin constraints appear to be holding some firms back from recruiting more staff… there is certainly a need to boost resources to ensure firms capitalise on demand in the new year.”
Slower job growth, easing cost pressures
Despite rising demand, employment growth remained sluggish, with job creation at one of the slowest rates in over two-and-a-half years.
However, input cost inflation eased to its lowest level since March 2024, providing some relief to businesses. Many firms continued discounting prices amid strong competition.
Despite solid expansion, business confidence remained subdued, suggesting firms remain cautious about future conditions.
In Dubai, the UAE’s commercial hub, the headline PMI rose to 55.5 in December from 53.9 in November, indicating the strongest growth in operating conditions in nine months.
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