FX.co ★ UAE Non-Oil Sector Growth Softest Since 2021

The S&P Global UAE Purchasing Managers' Index (PMI) decreased to 52.9 in July 2025, down from 53.5 in June, indicating the slowest expansion in non-oil business activity since June 2021. This deceleration arises primarily from ongoing geopolitical tensions, especially between Israel and Iran, which have dampened client demand and tourism, resulting in the slowest increase in new orders since August 2021. Despite softer sales, production remained strong as companies focused on clearing existing backlogs. Employment saw a modest rise, though job growth reached a four-month low, while backlogs expanded at the fastest rate since January. Purchasing activity experienced a downturn, reflecting a decline in demand and subdued supply chain performance. Input costs increased at the highest rate in three months, prompting a renewed hike in selling prices. Overall, business confidence saw a slight improvement, driven by expectations of stronger demand if regional tensions subside. Nevertheless, businesses identified growing competition, limited inventory, and constraints in hiring as persistent downside risks.