The non-oil private sector in the United Arab Emirates maintained growth in October, according to survey data published by S&P Global. The Purchasing Managers Index dropped to 54.8 from a previous reading of 55.3 in September. This figure stayed well above the threshold of 50 that separates contraction from expansion.
,Geopolitical disruptions weighed on business activity during the month. Resilient demand and continued public investment sustained the non-oil economy within growth territory.
,David Owen, Principal Economist at S&P Global Market Intelligence, spoke about the cost pressures facing businesses. "Output prices across the UAE non-oil private sector rose at the fastest rate in the survey’s history in October, as input cost inflation quickened to its highest since June 2022," Owen said.
,Owen stated that the rise reflected efforts by companies to pass cost burdens onto customers. Firms reported feeling the impact of higher fuel prices and increased charges for critical materials. He said these findings point to greater inflationary risks for the economy in the fourth quarter, driven by petrol and diesel price increases.
,Output growth remained strong at the start of the quarter, easing only marginally from a seven-month high recorded in September. Companies linked higher activity to construction, retail, tourism, and manufacturing. At the same time, some businesses noted constraints from regional conflict, competition, and lower discretionary spending.
,New orders rose at a sharper pace than in September, supported by new clients and repeat business. Companies also reported an increase in foreign order inflows, with new export work rising at its fastest rate in exactly two years.
,Employment fell fractionally in October, marking the third decline in the past five months. Certain firms reduced headcounts to control costs, offsetting recruitment by other businesses responding to higher sales.
,Business optimism strengthened during the month. Expectations for activity over the coming year rose to the highest level since January, driven by robust demand forecasts and hopes of improving regional conditions.
,In Dubai, the PMI rose to an eight-month high of 54.6 in October, up from 54.5 in September. The upturn in Dubai was driven by a sharp rise in new business volumes, matching the fastest growth rate recorded since February.
,Across the wider region, Saudi Arabia registered a PMI of 54 in October. Kuwait and Qatar recorded readings of 52.9 and 46.3 respectively.
