UAE non-oil private sector growth reached its highest level in seven months in September 2025, signaling strong momentum for the country’s diversified economy. According to the latest S&P Global Purchasing Managers’ Index (PMI), the sector’s PMI rose to 54.2 from 53.3 in August. This marked expansion reflects increased demand, rising employment, and improved business confidence across the nation.
Surge in New Orders
The most notable factor contributing to the PMI’s rise was the sharp increase in new business. The new orders sub-index jumped to 57.2 from 53.1, reflecting the strongest intake since February. Over 30% of firms surveyed reported higher order volumes, underlining the growing domestic demand. Export orders also saw a modest rise, although domestic demand remained the primary driver.
Employment Growth
In response to the increased demand, companies expanded their workforce at the fastest rate since May. The employment sub-index rose, indicating that businesses are confident in the sustained growth of the non-oil sector. This uptick in hiring reflects the positive business sentiment and the need to meet the rising demand.
Inventory Management and Cost Pressures
Despite the robust demand, firms remained cautious with their inventories, drawing down stocks for the third consecutive month. This conservative approach to inventory management suggests that businesses are carefully balancing supply with demand. Input costs rose solidly in September, driven by purchase price inflation. However, output price inflation eased due to competitive pressures, indicating that businesses are striving to maintain customer loyalty amidst rising costs.
Dubai’s Performance
Dubai’s non-oil private sector mirrored the national trend, with its PMI also rising to 54.2 in September from 53.6 in August. The emirate experienced a sharper increase in new business, output, and employment, reflecting a robust economic environment. The rise in Dubai’s PMI underscores the emirate’s pivotal role in the UAE’s economic diversification efforts.
Economic Outlook
The positive momentum in the non-oil private sector is expected to contribute to the UAE’s overall economic growth. The Central Bank of the UAE projects non-oil GDP growth of 4.5% in 2025, with some forecasts revising total GDP growth to 4.9%. The International Monetary Fund (IMF) anticipates the UAE’s real GDP to grow by 4.8% in 2025, well above the global average.
Analysts view the rebound in September as a sign of resilience in the UAE’s non-oil economy. The sector’s recovery from mid-year softness underscores its role as a primary growth engine for the national economy.
Conclusion
The UAE’s non-oil private sector demonstrated robust growth in September, driven by strong demand, increased hiring, and improved business confidence. This performance not only signals a recovery from earlier in the year but also highlights the UAE’s ongoing efforts to diversify its economy away from oil dependence. As the country continues to invest in various sectors, the outlook for sustained economic growth remains positive.
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