UAE non-oil business activity growth picks up in December, PMI shows

DUBAI: The United Arab Emirates’ non-oil private sector expanded at its fastest pace in nine months in December, driven by strong demand and increased business activity, a survey 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, remaining well above the 50.0 mark that separates growth from contraction, and was the third consecutive monthly increase.

The survey highlighted a sharp rise in new business with the new orders subindex rising to 59.3 from 58.0 the previous month, suggesting robust demand.

However, export demand growth softened, with that subindex falling to a seven-month low.

Backlogs also continued to accumulate at a rapid pace in December.

“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.”

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Despite the increase in demand, employment growth remained sluggish, with job creation at one of the slowest rates in over two-and-a-half years.

But input cost inflation eased to its lowest level since March 2024, providing some relief to businesses while firms continued to discount prices amid strong competition.

However, companies’ confidence in future business activity remained muted in December.

For Dubai alone, the headline PMI rose to 55.5 in December from 53.9 in November, indicating the strongest growth in operating conditions there in nine months.