{"id":109187,"date":"2025-11-06T00:00:00","date_gmt":"2025-11-06T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/uae\/non-oil-private-sector-expands-at-softer-pace-in-october\/"},"modified":"2025-11-06T00:00:00","modified_gmt":"2025-11-06T00:00:00","slug":"non-oil-private-sector-expands-at-softer-pace-in-october","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/uae\/2025\/11\/06\/non-oil-private-sector-expands-at-softer-pace-in-october\/","title":{"rendered":"Non-oil private sector expands at softer pace in October"},"content":{"rendered":"

The UAE\u2019s n<\/strong>on-oil private sector grew at a softer pace in October<\/strong>, though remained above mid-year lows, supported by stronger business activity and a rise in new orders. The country\u2019s seasonally adjusted <\/span>S&P Global PMI (pdf)<\/a> dipped to 53.8 in October, from <\/span>54.2<\/a> a month earlier.<\/span><\/p>\n

New orders soared in October<\/strong>, signalling the second consecutive month of demand recovery. This trend followed a low point for new business recorded in August, which was the weakest in four years. Firms attributed the expansion to an uptick in client numbers on the back of favorable economic conditions and expanded marketing efforts, as well as business intakes from foreign clients.<\/span><\/p>\n

Growth remained above the survey\u2019s historical trend for the third consecutive month in October<\/strong>, lifted by strong sales and the launch of new projects.<\/p>\n

Purchasing activity inched up, with firms reporting the biggest increase in input buying since June<\/strong>, which contributed to stabilized inventory levels, following a downward trend throughout 3Q.<\/p>\n

Input costs saw a modest increase during October <\/strong>as inflation cooled for the second month in a row, with only 4% of the surveyed firms reporting cost hikes. In turn, output inflation remained stable for the second consecutive month despite a marked increase in supplier prices, wages, and transport costs. <\/p>\n

Backlog accumulation accelerated in October, reversing a three-month trend<\/strong>. This was mainly driven by capacity constraints due to elevated new business and the administrative delays. <\/p>\n

Job creation grew at its slowest rate since March,<\/strong> which \u201cpartly reflected a relatively subdued level of business confidence,\u201d S&P Global Senior Economist David Owen wrote in the report. \u201cIn fact, the latest survey revealed that firms were the least optimistic in nearly three years.\u201d he adds.<\/p>\n

Why the drag?<\/strong> The main reason can be linked to a slowdown in hiring overseas labor, as well as a dip in construction projects across the GCC, which means less jobs are being created, TS Lombard analyst Hamzeh Al Gaood told EnterpriseAM, explaining that while absolute numbers are still growing, annual growth rates are slowing down. The UAE \u2014 outside of Dubai \u2014 is also still affected by oil prices and expectations of a supply glut, which could explain the more bearish sentiment, he added. <\/p>\n

The GCC at large: <\/strong>\u201cNon-oil activity in the Gulf region remained robust, but it is expected that it will not last any longer, particularly for Saudi Arabia,\u201d Capital Economics\u2019 James Swanston wrote in a research note seen by EnterpriseAM. \u201cWeaker oil export receipts will reinforce the need for fiscal consolidation and will more than offset any boost from looser monetary policy, resulting in softer non-oil GDP growth,\u201d he added.<\/p>\n

OVER IN DUBAI-<\/p>\n

The non-oil private sector in Dubai recorded its highest<\/strong> PMI figure since January.<\/strong> The headline PMI rose to 54.5, up from 54.2 last month, with an upturn in operating conditions. New orders accelerated again in October, supporting a stronger rise in output. <\/p>\n

Input prices accelerated at six-month high<\/strong>, reversing the decline witnessed in September. The increase was driven by heightened costs of raw materials, wages, and technology. In turn, firms raised their selling prices, reversing September's first drop in 10 months.<\/p>\n

Employment rates increase for the seventh consecutive month<\/strong>, but at a slower pace. Meanwhile, businesses were less optimistic about the year ahead outlook.<\/p>\n

ELSEWHERE IN THE REGION-<\/p>\n