UAE - Mubasher: The seasonally adjusted Purchasing Managers' Index (PMI) of the UAE edged up to 53.5 in June 2025 from 53.3 last May, according to the latest S&P Global PMI data.

UAE non-oil private sector businesses registered a contraction in demand momentum at the end of the second quarter (Q2) of 2025.

This was attributed to rising tensions across the region that made clients hesitant to spend.

While non-oil businesses reported a solid rise in their new order books, the rate of growth eased considerably and was the weakest since September 2021.

The report highlighted that the client demand was affected by the regional tensions due to the conflict between Israel and Iran.  

Despite lower sales, UAE non-oil firms expanded their output to a greater extent than in the previous month to address long-standing capacity pressures.

The survey highlighted that backlogs of work increased at the slowest rate in 17 months, although the rise remained stronger than its long-run average.

David Owen, Senior Economist at S&P Global Market Intelligence, said: "The UAE non-oil sector showed signs of a minor setback in June due to the conflict between Israel and Iran. The impact was primarily felt on the demand side, as some businesses reported a slowdown in orders driven by heightened tensions.”

“This resulted in a further easing of overall new business growth, which dropped to its lowest level in nearly four years,” Owen noted.

He stated:  “The rate of input cost inflation was the lowest seen in nearly two years, which allowed firms to offer discounts to customers. With consumer price pressures appearing limited, the latest data suggests that a rebound in sales growth is wholly possible in the coming months should regional tensions ease.”