The UAE’s non-oil economy pressed on in August, but the gears didn’t turn smoothly. Production gained pace, yet sales slipped to their weakest stretch in more than four years, leaving growth looking increasingly fragile.
The latest purchasing managers’ index landed at 53.3—just above July’s 49-month low of 52.9. The reading still signals expansion, but the margin is narrowing.
Orders, a key gauge of demand, slid to 53.1, the lowest since mid-2021, as tighter competition and supply chain snags wore down momentum. With new business fading, companies leaned on backlogs to keep output flowing.
There was, however, a burst of strength: output growth climbed to a six-month high, supported by ongoing projects and a steady local customer base. Yet caution was visible—firms cut purchases for the first time in more than four years, wary of carrying extra stock in an unpredictable environment.
Cost pressures added another layer of strain. Wages rose at their fastest pace in over a year, while firms passed on higher expenses to consumers, pushing prices up at the sharpest clip in five months.
Even so, optimism didn’t vanish. Executives flagged stable domestic conditions and long-standing client relationships as reasons to expect steadier months ahead.
Dubai’s private sector followed a similar script, with its PMI ticking up to 53.6 from 53.5, driven by the strongest output growth in seven months.
