UAE - Mubasher: The seasonally adjusted S&P Global UAE Purchasing Managers’ Index (PMI) fell to 52.9 in March from 55.0 in February 2026, according to the latest data released by S&P Global.
This reading signalled a softer, yet still positive, improvement in non-oil private sector business conditions, marking the joint-lowest level since June 2021.
Non-oil firms reported a considerable slowdown in output growth during March, as the war in the Middle East weighed on customer demand and disrupted supply chains, while also driving up cost pressures.
The pace of expansion in business activity weakened notably, recording one of the sharpest monthly declines on record. However, the companies continued to report resilient sales pipelines and ongoing project activity.
New order growth rate remained positive but slowed to a seven-month low, as some firms cited robust demand while others pointed to weaker tourism, supply shortages, and higher freight costs impacting sales. Meanwhile, the export orders also increased modestly.
Supply chain disruptions intensified, with delivery times lengthening due to route closures, including the Strait of Hormuz, leading to the first deterioration in supplier performance since September 2021.
Backlogs of work rose markedly amid project delays and administrative hurdles, prompting firms to increase hiring, although job creation remained moderate due to rising cost concerns.
Purchasing activity expanded marginally at a slower pace, while some companies relied on existing inventories, resulting in the first decline in stock levels in three months.
Input cost inflation accelerated sharply, driven by higher prices for logistics, fuel, energy, insurance, and materials such as steel and machinery. Moreover, the purchase prices rose at the fastest rate since July 2024.
Consequently, firms raised their selling prices at the quickest pace in nearly 11 and a half years, reflecting increased costs and demand.
Looking ahead, business confidence weakened to its lowest level in over five years, as firms expressed concerns over the prolonged economic impact of the regional conflict, despite ongoing support from government spending and long-term growth strategies.
David Owen, Senior Economist at S&P Global Market Intelligence, said: “The UAE non-oil private sector was knocked back by the impacts of the war in the Middle East in March. That said, for many firms, order books were resilient and output expanded.”
He added: “Although surveyed businesses displayed high levels of uncertainty, with activity expectations at a 61-month low, they took comfort from strong long-term growth projections, high demand in tech and other sectors, and fiscal spending plans including Abu Dhabi’s Economic Vision 2030.”
Dubai PMI
The S&P Global Dubai Purchasing Managers’ Index declined to 53.2 in March from 54.6 in February, marking the weakest improvement in non-oil private sector conditions for nine months.
Output and new business growth softened but remained solid overall, as firms cited the economic impact of the regional conflict.
Supply chain conditions worsened, with delivery times lengthening at the fastest rate since July 2022, while input inventories fell at a record pace due to difficulties in securing materials.
Cost pressures intensified in Dubai, with higher input prices leading firms to increase selling charges, while business confidence for the year ahead dropped to its lowest level since the end of 2020.
