The UAE's non-oil private sector maintained strong growth momentum in October 2025, with business activity expanding at a solid pace that remained above mid-year trends despite a slight moderation from September's peak.

The seasonally adjusted S&P Global UAE Purchasing Managers' Index registered 53.8, down marginally from 54.2 the previous month but still well above the 50-point mark that separates expansion from contraction.

This sustained growth aligns with the International Monetary Fund's bullish outlook for the UAE economy, which projects real GDP growth of 4.8 per cent in 2025, outperforming both regional and global averages.

The underlying drivers of October's expansion revealed significant strength across key business metrics. New business volumes grew at their fastest pace since August, supporting substantial increases in output and purchasing activity. Companies reported that stronger sales and new project launches drove production levels significantly higher, with the rate of growth remaining comfortably above the mid-year average.

The healthy demand environment allowed businesses to increase their purchasing activity at the fastest pace since June, helping to rebuild inventory levels that had declined throughout the third quarter.

A particularly encouraging development came on the cost front, where input price pressures continued to moderate.

October marked the second consecutive month of slower cost increases, with the rate of inflation reaching its lowest point since June. This moderation helped businesses maintain stable output prices, enhancing their competitive positioning in both domestic and international markets.

Remarkably, only 4 per cent of surveyed firms reported significant cost increases, suggesting widespread stability in operating expenses across the non-oil sector.

The employment picture reflected a more cautious approach, with job creation slowing to its softest pace since March.

David Owen, senior economist at S&P Global Market Intelligence, noted that“employment remained a weak spot in an otherwise solid PMI survey, partly reflecting a relatively subdued level of business confidence.”

Indeed, the survey revealed that business optimism dipped to a 34-month low, though it's worth noting that sentiment remained in positive territory overall, with firms still expecting growth in the coming year, just at a more moderate pace than seen in recent months.

Dubai emerged as a particular bright spot in the October data, with the emirate's PMI climbing to 54.5 – its highest reading since January. The increase was driven by stronger new order growth and elevated output levels, underscoring Dubai's continued appeal as a business and tourism hub.

This performance aligns with the Central Bank of the UAE's assessment of continued economic strength, supported by quality data compilation and analysis that informs monetary and financial sector decision-making.

The sustained expansion of the UAE's non-oil economy reflects the success of the country's diversification strategy and its resilient economic fundamentals. The IMF has consistently praised the UAE's“strong resilience” to global economic uncertainty, noting the nation's comfortable fiscal buffers and sound financial sector.

According to analysts, the current economic landscape, the combination of solid demand growth, stable costs, and supportive macroeconomic policies provide a strong foundation for continued expansion through the remainder of 2025 and beyond.

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