Today's Edition
A.SREENIVASA REDDY (ABU DHABI)
The UAE’s non-oil private sector remained in solid expansion mode in May, with the seasonally adjusted S&P Global UAE Purchasing Managers’ Index (PMI) registering 53.3, slightly lower than 54.0 in April but well above the neutral 50.0 mark that separates growth from contraction.
PMI is a key economic indicator measuring business activity in the manufacturing and services sectors. A reading above 50 signals expansion, while below 50 indicates contraction.
“Data continued to signal a solid improvement in the performance of the non-oil private sector economy. Demand conditions remained strong, supporting a marked increase in output, although the rate of growth trended down from its recent bullish run,” the S&P Global report said.
Companies reported a continued rise in new orders in May. While the pace of growth eased from the previous month, it remained robust. This upturn was attributed to favourable demand conditions, strong client relationships, new marketing strategies, and diverse product offerings.
“From an overall perspective, the survey signals that the UAE economy is performing well. The survey data backs up the trend of falling inflationary pressures, as businesses saw input costs rise at their slowest rate since the end of 2023,” said David Owen, Senior Economist at S&P Global Market Intelligence.
The report said that companies increased their output and the expansion was sharp. According to survey members, higher sales often translated into greater activity, although some reported that global economic uncertainty linked to US tariffs had negatively affected output.
Inventory levels dropped in May, as businesses scaled back purchasing due to strong stock levels and supply constraints. Employment growth, meanwhile, hit its highest level in a year, with firms citing increased workloads and rising backlogs of work.
Input cost inflation eased to its slowest pace in nearly 18 months. While some firms saw higher raw material and transport costs, only 5% of respondents reported an increase from April.
Selling prices rose marginally, reflecting modest efforts to pass on cost increases, partially offset by discounts.
Dubai PMI
Dubai’s PMI stood at 52.9 in May, reflecting a solid improvement in operating conditions in the non-oil private sector.
“Businesses continued to receive higher levels of new orders, with the rate of growth ticking up to a four-month high,” the report said, attributing the trend to improved client confidence, marketing strategies, and competitive pricing.
While overall business activity rose sharply, the pace of growth softened. Purchase stocks declined for the first time in 2025, contributing to the weakest rate of input cost inflation in 17 months.
