ABU DHABI (Reuters) – The UAE’s non-oil private sector continued to expand robustly at the start of 2025, although capacity pressures and competitive challenges posed headwinds, a survey showed on Wednesday.
The seasonally adjusted S&P Global UAE Purchasing Managers’ Index was 55.0 in January, slightly down from December’s nine-month high of 55.4, but well above the 50.0 mark indicating expansion.
Business activity and new orders rose sharply, driven by favourable market conditions and easing cost pressures, although at a slightly slower pace, with the new orders sub index easing to 59.0 in January, from December’s 59.3.
“Robust expansions in activity and new business, as well as lower input cost inflation, suggest the economy is in a healthy position,” said David Owen, Senior Economist at S&P Global Market Intelligence.
Input cost inflation fell to a 13-month low, allowing firms to increase purchases, but capacity pressures persisted, with backlogs of work rising at their fastest pace in eight months.
“Strong competition and cash flow concerns arising from heavy backlogs have appeared to sow doubt among firms that they can continue to boost their revenues,” Owen said, noting that total confidence was at its lowest level since December 2022.
A separate index for Dubai eased slightly to 55.3 from December’s 55.5, as businesses reported improved conditions but expressed subdued expectations for future activity.
(Reporting by Reuters; Editing by Christina Fincher)
