UAE PMI rises to 4-month high after June slump, hiring resumes

By the Editorial Team · Thursday, August 6, 2026

The UAE's non-oil private sector grew robustly in July, with the PMI rising to 52.7 as businesses benefited from easing regional tensions, increased consumer spending, and a rise in export orders. However, despite the rebound and resumed hiring, companies remain cautious about future output amid ongoing regional uncertainties and competitive market pressures.

The United Arab Emirates' non-oil private sector experienced its strongest growth in four months during July, rebounding from a significant slump in June. The seasonally adjusted S&P Global UAE Purchasing Managers’ Index (PMI) rose to 52.7 last month, up from 50.8 in June, when the index had hit its lowest level in more than five years. A reading above 50 indicates expansion in the sector.

The improved business conditions in July were driven by a combination of easing regional tensions, increased consumer spending, and demand associated with domestic infrastructure projects. Firms reported a gradual recovery in customer confidence, although some companies noted that tight client budgets and fierce competition continued to restrain demand.

July marked the first time since March that export orders increased, with businesses attributing the rise to stronger regional activity. While the increase was modest, it represented the fastest growth in export business in a year. Concurrently, the volume of outstanding work rose at the quickest rate in four months, reflecting both heightened customer demand and supply challenges linked to freight congestion.

In response to growing demand, companies expanded their output during July. The pace of production growth accelerated slightly, though it remained below the historical average for the UAE non-oil private sector.

Employment trends showed a marked shift, with firms resuming hiring after the steepest workforce reductions in nearly six years recorded in June. The decision to add staff was primarily linked to stronger demand conditions.

Despite these positive indicators, business sentiment about future output weakened for the third month in a row, falling to its lowest level since March. Only 7 percent of surveyed companies expected an increase in output over the next year.

David Owen, Principal Economist at S&P Global Market Intelligence, noted that volatility in the Strait of Hormuz continued to create uncertainty about the future. He also highlighted persistent price pressures during July, which businesses found difficult to fully pass on to customers due to a competitive market environment.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.