UAE Non-Oil Private Sector Prices Hit Record Highs

The United Arab Emirates non-oil private sector continued to expand in October, though the S&P Global Purchasing Managers’ Index eased slightly to 54.8 from 55.3 in September. While growth remained steady, output prices rose at the fastest rate since the survey began in August 2009. This surge occurred as firms passed on higher input costs for fuel, energy, raw materials, and freight to their customers.

Input cost inflation reached its highest level since June 2022. David Owen, Principal Economist at S&P Global Market Intelligence, noted that the unprecedented price rise reflected efforts to pass cost burdens to customers as firms felt the impact of higher fuel prices and increased charges for critical materials.

Strong demand in tourism, retail, construction, and manufacturing supported the overall growth, and new export work increased at the fastest pace in two years. In Dubai, the PMI reached an eight-month high of 54.6 due to a sharp increase in new business volumes. However, some companies reported constraints from regional conflict and weaker discretionary spending, leading to fractional employment declines as firms cut headcounts to manage costs.