In October, UAE non-oil businesses implemented their most significant price increases since records began in 2009, driven by a surge in operational expenses and robust customer demand. According to the latest S&P Global Purchasing Managers’ Index (PMI), the headline reading of 54.8 confirms that the sector remains in growth territory despite a slight dip from September. Firms are struggling with rising costs for raw materials, fuel, and energy, forcing them to pass these burdens onto consumers to protect their profit margins. While input price inflation has hit its highest level since mid-2022, the underlying demand remains strong, fueled by both local clients and a significant uptick in export orders.

Despite the inflationary environment, business optimism has reached its highest point since January, with companies expecting sustained growth in sectors like tourism and retail. While some businesses have cautiously trimmed their workforces to manage overheads, output continues to climb, and a reliance on local supply chains has helped stabilize vendor performance. Furthermore, Dubai’s specific PMI performance reinforces this regional trend, hitting an eight-month high as firms capitalize on strong order books. Moving into the final quarter of the year, UAE businesses appear focused on balancing the need for expansion with the realities of rising costs, maintaining a cautious yet confident outlook for the months ahead.