The steep increase in selling prices of non-oil businesses in September is an indication of a higher UAE inflation number for the third quarter of this year, according to S&P Global Market Intelligence.
The rising rate of inflation in selling prices by businesses is being partly driven by an increase in demand conditions in the UAE's non-oil private sector, David Owen, principal economist at the company, told The National.
S&P Global Market Intelligence on Monday said non-oil private sector businesses in the country last month reported the steepest jump in sales prices since May 2011.
“Out of the firms monitored in the survey, 13 per cent reported an increase in their selling prices since the previous month, compared to 5 per cent that noted a decline,” Mr Owen said.
“The indicated rate of inflation was strong in the context of the survey history, as past data has often signalled a relatively cautious approach to price hikes among non-oil companies.”
The rise in selling prices is also being driven by higher costs for materials, labour and energy amid the Iran war and will reflect in the pace of annual increase in consumer prices, Mr Owen said.
The seasonally adjusted S&P Global UAE Purchasing Managers' Index for September, however, remained steady at 55.3, the same as the previous month and well above the 50-mark that indicates growth in economic activity.
With the non-oil economy having shrugged off the mid-year slowdown linked to the war, businesses have started to pass on the higher cost of inputs to their customers.
“The seasonally adjusted Output Prices Index has a strong historical relationship with consumer price inflation, as the measure captures changes in business charges, which has strong implications for overall consumer prices,” Mr Owen said.
“The latest index reading points to consumer prices rising sharply at the end of the third quarter, with the annual pace of inflation accelerating notably.”
Consumer prices have been affected by the sharp rise in fuel prices this year. Petrol prices in the UAE are about 80 per cent higher than in February, before the Iran war started.
The disruption to shipping in the Strait of Hormuz has affected supply chains severely, pushing up the costs of materials and inputs.
Inflation figures for the third quarter of the year have not yet been revealed.
Since 2009, S&P Global Markets Intelligence has been compiling the S&P Global UAE PMI Index, a composite indicator designed to give an overview of operating conditions in the non-oil private sector.
The company index is derived from responses sent by purchasing managers in a panel of around 1,000 non-energy private sector companies. The panel represents sectors including manufacturing, construction, wholesale, retail and services.
The September survey data signalled that input cost pressures had been above the long-run trend in each month since March 2026 and the stronger increase in selling prices last month was “broad-based across the sectors of the non-oil private sector economy”, Mr Owen said.
