The UAE’s Non-Oil Economy Is Firing on All Cylinders
The UAE‘s non-oil private sector has kicked off 2026 with its strongest performance in 12 months, and the numbers tell a compelling story. The S&P Global UAE Purchasing Managers’ Index (PMI) rose from 54.9 in January to 55.0 in February, reaching its highest level in a year and signaling a solid, broad-based expansion in business conditions. Any reading above 50 indicates growth, making this a confident stride forward for the Emirates economy.
What’s Driving the Growth
Stronger output was driven by higher demand, successful contract wins, and growth in key sectors including construction, real estate, logistics, and technology. Rising tourist arrivals, the expansion of e-commerce channels, and growing demand for AI-related products also supported activity.
This is not growth concentrated in one area; it’s a wide-ranging, multi-sector uplift that reflects the depth and maturity of the UAE’s economic diversification strategy.
New Orders, More Jobs, Better Supply Chains
New orders recorded a sharp increase, supported by robust tourism activity, expanding e-commerce, and rising demand linked to artificial intelligence. In response to heavier workloads, firms stepped up hiring, posting the strongest increase in employment since last November, and continued to accumulate input inventories, aided by faster delivery times and more reliable supply chains.
Job creation in Dubai’s non-oil sector hit a two-year high in February, as firms highlighted increased opportunities and new projects. That’s a strong signal that businesses aren’t just busy today, they’re investing in tomorrow.
Cost Pressures Are Easing
One of the most encouraging aspects of February’s data is the improvement on the cost front. Input prices rose modestly at their slowest pace since last October, while lower fuel prices helped contain cost pressures. For businesses that have faced margin pressure over the past year, this is welcome relief, and it creates room for continued investment and hiring.
The Bigger Regional Picture
The UAE’s performance sits within a broader wave of Gulf economic optimism. The upturn in the UAE’s non-oil private sector aligns with the broader trend across the Gulf Cooperation Council, where countries including Saudi Arabia are pursuing economic diversification to reduce reliance on crude revenues. Saudi Arabia’s PMI stood at 56.3 in January, the highest in the region, while the UAE’s February reading keeps it firmly in the upper tier of regional performers.
A Confident Start to 2026
February’s PMI reading is more than a statistic — it’s a signal that the UAE’s economic fundamentals remain strong, its diversification agenda is delivering real results, and business confidence is firmly intact. With demand robust, supply chains improving, and employment growing, the non-oil economy appears well-positioned to sustain this momentum well into the year ahead.
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