The UAE non-oil private sector continued expanding in December despite slower momentum. From the start, survey data highlighted steady activity and a moderate pace of growth. Analysts pointed to a soft slowdown while stressing a stable non-oil private sector growth outlook.
According to survey results, business activity remained firmly in expansion territory. However, growth eased slightly compared with November levels. The seasonally adjusted S&P Global UAE Purchasing Managers’ Index dropped to 54.2 in December. This reading followed a nine-month high of 54.8 in November. Despite the decline, the index stayed well above the 50 mark.
The PMI figure also matched closely with its long-term average. This trend signaled steady conditions across the non-oil economy. Businesses continued operating under positive demand conditions. Still, companies faced growing pressure from higher costs.
Output levels rose strongly during the month. In fact, output growth ranked among the fastest recorded during 2025. Firms reported higher activity across several sectors. Yet rising expenses affected operating conditions.
Input costs increased at the sharpest pace in fifteen months. Higher wages and rising material prices drove the increase. Companies responded by adjusting pricing strategies and controlling expenses. As a result, cost management became a growing concern.
Demand stayed solid across the UAE non-oil sector. However, the pace of new order growth slowed slightly. The new orders index fell to 57.2 in December. It had reached 57.8 in November. Even so, demand conditions remained supportive.
Analysts noted that businesses ended 2025 on a strong footing. Growth stayed healthy but showed signs of cooling. Survey commentary described the year as positive yet less intense. This trend marked the weakest annual PMI performance since 2021.
Cost pressure also affected inventory decisions. Many firms reduced stock levels to protect cash flow. Rising demand and processing delays increased order backlogs. Backlogs reached their highest level in ten months.
Despite these challenges, firms maintained positive outlooks. Companies continued expecting growth in the coming months. Still, optimism softened due to market saturation concerns. Rising costs also weighed on confidence.
Dubai showed a similar trend during December. The city’s headline PMI edged down to 54.3. This figure followed readings of 54.5 in previous months. Even so, output in Dubai grew at its fastest pace since March 2024.
Overall, the data pointed to resilience across the UAE economy. Businesses adapted to changing cost conditions and slower demand growth. Policymakers and investors continued monitoring price pressures closely. These factors will shape non-oil private sector growth in early 2026.
The December data confirmed steady expansion despite mounting challenges. Firms balanced demand strength against rising expenses. This balance remains critical for sustaining non-oil private sector growth across the UAE.
