Easing regional tensions and a surge in new business helped the United Arab Emirates' non-oil private sector rebound "strongly" in July from a five-year low in the previous month, data from S&P Global showed Wednesday.
The S&P Global UAE PMI rose to a four-month high of 52.7 from June's 50.8. New business in the month climbed at its fastest rate since February, as monitored companies reported that client confidence gradually recovered amid improving regional conditions.
Notably, non-oil firms saw export demand increase, with a "modest" boost in export sales that was still the quickest pace in a year, signaling an uptick in regional activity. Job creation also returned to positive territory in July, reversing the previous month's near six-year record decline in headcount, as companies sought to grow their numbers to meet rising customer demand.
Conversely, cost inflation remained elevated in July, creeping closer to April's peak, with 10% of surveyed companies reporting higher expenses across key inputs including fuel, food, fertilizers, software, and shipping. Amid cost headwinds and ongoing supply chain disruptions, business confidence dropped for the third straight month, with only 7% of non-oil companies anticipating production expanding over the coming year.
"Still, the volatile situation in the Strait of Hormuz continues to make the future uncertain and kept price pressures elevated in July, which firms struggled to fully pass on to customers amid a competitive business environment. Firms also saw a reduction in inventories despite a sharp rise in purchasing, suggesting they are still operating with tighter stock volumes and longer supply schedules," S&P Global Market Intelligence Principal Economist David Owen said.
Zooming in on Dubai, the PMI also rose to 51.7 in July 2026 from 50.7 previously, with new orders rising to their highest level since March amid growing customer demand. However, business activity growth eased to the slowest rate since June 2021 due to competition and pricing headwinds.
