The UAE’s non-oil private sector saw its largest expansion in seven months in September, marking a solid improvement in activity, boosted by new business intakes. The country’s seasonally adjusted S&P Global PMI (pdf) rose to 54.2 in September, up from 53.3 a month earlier.

September’s reading lands just below the survey long-run average, suggesting a good recovery from July’s plunge.

New orders accelerated at their highest level since February, as demand recorded a strong rebound from August’s four-year low, lifted by elevated client engagement and new projects. The sub-index for new orders surged to 57.2 in September, up from 53.1 a month earlier, according to Reuters. “Over 30% of surveyed firms reported an increase in new order intakes during the month, which drove a sharp improvement in sales growth from its over four-year low in August,” S&P Global Senior Economist David Owen wrote in the report.

The improved conditions helped boost output, with businesses increasing purchasing after cutting it for the first time in over four years in August.

Input costs rose significantly in September, mirroring a broader trend throughout the third quarter. This increase was driven by higher purchase prices, although the impact was somewhat mitigated by an easing salary inflation.

In turn, output inflation rose at a softer rate as businesses were reluctant to increase their selling prices amid competition concerns. “Competitive pressures were again noted as a key issue, with several panellists linking this to caution around purchasing and pricing decisions,” Owed said.

Employment inched up modestly, though at the fastest pace since May, helping ease backlog growth. “Companies continued to accumulate work-in-hand at a solid pace, but the uplift was the second-weakest in 20 months,” the report read.

Business sentiment remains positive: Non-oil firms’ outlook for the year-ahead remained strong in September, but their optimism was marginally lower than August’s 10-month high. “Around 15% of respondents held a positive view about future output, while less than 1% were downbeat about their prospects,” the note said.

Things could turn towards moderation through the rest of the year: Looking ahead, non-oil sector activity across much of the Gulf is forecast to moderate, Capital Economics’ James Swanston noted in a recent research note seen by EnterpriseAM last month. “Low oil prices will more than offset rising output volumes and, in turn, export receipts will be weaker this year than last,” Swanston wrote, adding that “current account and budget balances will deteriorate, prompting officials to make fiscal policy less supportive.”

OVER IN DUBAI-

Dubai also had another good month: The emirate’s non-oil private sector recorded another firm improvement in September, with its headline PMI inching up to 54.2 during the month, up from 53.6 in August, signalling a robust expansion amid a significant rise in new work levels and an increase in sales, output, and hiring.

Input costs accelerated in September, as inflation hit a five-month high. However, firms slashed their selling prices for the first time since last November due to elevated competition.

Job creation hit its fastest rate in 12 months during September, although the increase was marginal. Businesses also were more optimistic about the sector’s performance in the future, compared with the end of 2Q 2025.

ELSEWHERE IN THE REGION-

  • In Saudi Arabia, non-oil business activity saw a robust improvement, with the seasonally adjusted figure coming in at 57.8 in September, up from 56.4 a month earlier (pdf) ;
  • Kuwait’s non-oil private sector saw a softened expansion in business conditions, with the headline PMI dropping to 52.2 in September, from 53.0 in August (pdf) ;
  • Egypt’s non-oil private sector activity (pdf) deepened its contraction in September, falling to 48.8, from 49.2 a month earlier.
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