UAE non-oil activity accelerates to 11-month high as hiring picks up

Employment rose at fastest rate since May 2024, but increased wage costs added to business expenses

Shopping in Dubai. The improvement in the UAE's Purchasing Managers' Index was led by a strong recovery in demand growth across the non-oil sector, S&P said. Reem Mohammed / The National

The UAE's non-oil private-sector grew at the fastest pace for 11 months in November, as robust market conditions boosted new business volumes and increased sales.

The seasonally adjusted S&P Global UAE Purchasing Managers' Index reached a nine-month high of 54.8 in November, up from 53.8 in October and above its long-run average of 54.3. It remained well above the 50-mark that separates growth from contraction.

"The UAE non-oil private sector has delivered a robust performance in the fourth quarter so far, with November's PMI indicating the strongest improvement in business conditions in nine months," said David Owen, senior economist at S&P Global Market Intelligence.

"The upturn was often linked to strong customer demand and healthy sales pipelines that encouraged firms to expand both their output and staffing."

Although employment growth remained moderate overall, the pace of hiring in the UAE in November was the quickest in 18 months.

This signalled a "partial rebound in labour markets after a relatively muted period," Mr Owen said.

However, the sharper rise in employment contributed to rising wage costs and higher business costs.

"Firms cited the need to raise salaries in response to cost-of-living pressures and skill shortages," Mr Owen said. "This led to a greater uplift in overall business expenses which could contribute to broader inflationary pressures in the coming months."

Despite this, private sector businesses' expectations for future activity edged up from October's near three-year low.

More than 13 per cent of businesses anticipated higher output in the next 12 months compared to current levels, while less than one per cent expected a decline.

Survey respondents often cited strong sales pipelines and a favourable business environment as key reasons for their optimism, the report said.

UAE's economic momentum

The UAE is accelerating efforts to diversify its economy from oil and investing in developing its non-oil sectors from tourism to advanced manufacturing.

The UAE Central Bank in September increased its 2025 growth forecast for the country’s economy from 4.4 per cent to 4.9 per cent, driven by a surge in non-oil activity.

The International Monetary Fund's growth forecast for the UAE is slightly below that of the country's banking regulator.

The Washington-based fund projects the UAE's gross domestic product (GDP) to expand at a 4.8 per cent pace this year, driven by strong non-hydrocarbon growth and Opec production increases, it said in October.

Meanwhile the World Bank also said that the UAE economy continues to post strong, broad-based growth with a balanced oil and non-oil mix. It also forecasts real GDP to reach 4.8 per cent in 2025 and said the country is leading the Gulf in diversifying its export base.

Dubai PMI

Dubai's non-oil private sector experienced marked improvement in operating conditions in November.

Dubai's PMI held steady at 54.5 in November, driven by higher sales and an upturn in business conditions, the report said.

Dubai's economy expanded by 4.4 per cent in the first half of 2025 as the push for diversification accelerated the pace of growth during the second quarter of this year, according to government data in November.

The emirate's total GDP in the six months to the end of June reached Dh241 billion ($65.6 billion), with second quarter growth surging by 4.7 per cent annually to Dh122 billion.

Dubai aims to double the size of its economy to Dh32 trillion over the next decade and establish the emirate among the top three global cities as part of its D33 strategy, launched in 2023.