UAE’s Non-Oil Sector Maintains Steady Growth Despite Slower Hiring in October

The non-oil sector of the UAE economy remained on its positive growth trend in October, which points to a long-term investment in the economy despite a marginal decrease in confidence and employment. The index was recorded by the recent S&P Global UAE Purchasing Managers’ Index (PMI) at 53.8 (it was 54.2 in September, but that is still well above the 50.0 level that indicates growth and contraction). The statistics were indicative of the growing business activity, new order recovery, and more purchasing activity, which emphasized the good economic fundamentals of the country. Nevertheless, a decline in positive expectations and slower growth in the number of jobs portended a more circumspect business cycle at the end of 2025. Get the latest stories and news insights on our Gulf Independent News page.

Solid Business Action and Thriving Demand Recovery

The business activity has improved significantly in October, with businesses recording improved levels of output through increased sales and the initiation of new projects. The second consecutive month of rising volumes of new orders was good news that there is a solid recovery in demand following the dismal August, the worst in more than four years. To this, the companies reacted with the biggest surge in buying since June, which served to stabilize the inventories that had fallen through the third quarter.

There was a reduction in the input cost pressures and the slowest increase in expenses since June, as a result of which the businesses could keep the output prices constant. Four percent of companies were experiencing a cost rise, indicating that inflationary forces had been kept at a relatively high level. According to analysts, this pricing stability offered a good ground to further develop the non-oil economy, and this further supported the fact that the UAE has one of the strongest markets in the region in terms of resilience in the face of global uncertainties.

Trust is Lost as Recruiting Stagnates

However, even with the consistent performance, the business sentiment deteriorated significantly in October to the lowest point since 34 months ago. The depressed expectations resulted in a decelerated pace in employment, and job creation almost came to a crawl, the slowest in thirteen months. David Owen, Senior Economist at S&P Global Market Intelligence, explained the economic slowdown by relatively low levels of business confidence, yet pointed to the ongoing improvement in new business and purchasing activity as some good news.

The PMI reached a high of nine months of 54.5 in Dubai, which is slightly more than the 54.2 in September and indicates a strong improvement in the operating conditions. Nonetheless, like the national trend, the Dubai businesses were less optimistic about the future year. The ambivalent feeling indicates that the demand and production are still high, but firms are also becoming more cautious about future growth in the face of the global market headwinds and uncertainties related to costs.

Also Read: UAE’s Job Market 2025: Global Forces Reshaping Skills and Employment Patterns