UAE Non-Oil Private Sector Hits Four-Month High in July

The United Arab Emirates non-oil private sector strengthened in July, with its Purchasing Managers’ Index (PMI) rising to a four-month high of 52.7 from 50.8 in June. This growth was driven by a rebound in new orders, a five-month high in new business, and a return to employment growth.

Economic activity recovered despite significant headwinds from the conflict with Iran, which began on February 28 and included the closure of the Strait of Hormuz. While non-oil GDP grew 4.8 percent in the first quarter, businesses continue to face supply chain disruptions, cost pressures, and a drop in confidence regarding future output to its lowest point since March. The United States and Iran are currently negotiating a deal to reopen the Strait of Hormuz to relieve this economic pressure.

Regional trends showed similar patterns in Qatar, where non-energy business conditions saw the slowest deterioration in five months. Qatar's PMI improved to 48.5 from 47.6, supported by a slower decline in new orders and increased employment, though it remains below the neutral 50-point threshold. Both nations continue to struggle with inflationary pressures, with Qatar reporting input price inflation for a seventh consecutive month.