The S&P Global UAE PMI climbed to 55.3 in August 2026 from 52.7 in July, signaling the sharpest improvement in non-oil private sector business conditions since December 2024. The upturn was driven by a strong increase in new business, which rose at one of the fastest rates in more than two years, while output growth quickened to a six-month high.
Export demand expanded for a second consecutive month, reversing the declines seen throughout Q2. Purchasing activity rose sharply, enabling firms to rebuild input inventories at the quickest pace in nearly three years. At the same time, better supplier performance and increased use of local vendors helped alleviate supply pressures.
Input cost inflation eased to its lowest level since February, despite higher energy and construction material prices, and selling price inflation remained contained amid intense competition. Employment declined for the second time in three months, as firms stayed cautious on hiring in the face of regional uncertainty, although business confidence strengthened to its highest level since April.
