UAE Business Activity Picks Up As Prices Rise At Fastest Pace In Over 15 Years

(MENAFN- Khaleej Times) Business is picking up across the UAE's non-oil economy, but customers are paying more for it.

According to the monthly S&P Global UAE Purchasing Managers' Index (PMI), UAE firms raised their prices in September at the fastest pace in more than 15 years, as stronger demand gave them room to pass on higher costs.

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The index stayed at 55.3, matching August's 20-month high. A reading above 50 means business conditions are improving compared with the previous month.

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Companies reported that activity grew at its fastest rate since February, just before war broke out in the region. Many said they had more customers and a healthy pipeline of new work, across a range of sectors.

Orders kept rising, though more slowly than in August. Overseas demand helped, with new export business growing for the third month in a row and at its strongest pace since November 2024.

Dubai's PMI rose to 54.5 in September from 54.1 in August, its strongest reading in seven months. Business activity grew at its fastest pace of 2026 so far, and new orders rose markedly, with export demand the strongest in two years.

Firms in the emirate hired more staff, but work still built up. Price rises were the steepest since January 2014 as companies passed higher costs on to customers.

The PMI is compiled from a monthly survey of purchasing managers at around 1,000 non-energy private sector companies. The data was collected between September 10 and 24.

Why prices are rising

Selling prices rose at the sharpest rate since May 2011, broadly matching the increase in what firms are paying for supplies. Suppliers charged more for raw materials, and freight costs went up as well.

David Owen, principal economist at S&P Global Market Intelligence, said the data showed the non-oil economy had“moved past the mid-year slowdown” linked to the Middle East conflict.

He added that firms appeared to be using the stronger demand to rebuild margins after months of heavy cost pressure. With oil markets volatile and shipping routes still constrained, he said, costs and prices may stay high.

Hiring stays cautious

Employers added staff in September after cutting jobs in August, but only slightly, despite the surge in orders. As a result, unfinished work piled up again, though more slowly than in August.

Companies also bought construction materials such as concrete and steel, along with electrical items, and their stocks of inputs rose at the fastest pace since November 2023. Deliveries from suppliers improved for the fourth month in a row.

Despite the strong figures, businesses remain wary.

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