UAE non-oil growth holds but costs rise

PRIVATE SECTOR ENDS 2025 IN EXPANSION MODE BUT INPUT COSTS SEES SHARPEST RISE IN 15 MONTHS

- BY NIVETHA DAYANAND

UAE employment growth softened in December, with firms adding staff at a marginal pace.

(Virendra Saklani/Gulf News)

The UAE’s non-oil private sector closed 2025 with a solid expansion in activity, even as firms moved to protect margins by trimming inventories and limiting hiring.

The latest S&P Global UAE Purchasing Managers’ Index-shows the nonoil private sector continued to expand at a solid pace in December, supported by steady demand, improving market conditions and supportive domestic policies. The headline Purchasing Managers’ Index eased to 54.2 from 54.8 in November, but remained firmly above the 50 mark that separates growth from contraction and closely in line with its long-run average.

Higher output, but at a cost

Activity levels remained robust as the year drew to a close. More than a quarter of surveyed companies reported higher output in December, making it one of the fastest growth periods recorded in 2025. Firms linked the expansion to stronger new orders, rising customer numbers, tourism-driven demand and improved international business flows.