The UAE’s non-oil private sector maintained its growth trajectory throughout June, with the S&P Global Purchasing Managers' Index (PMI) holding at 50.8. While this figure represents a slight cooling from May’s 52.6, it remains comfortably above the 50-point mark that separates expansion from contraction. This growth is largely driven by robust domestic demand, sustained government investment, and a strengthening in new business orders, which reached a three-month high. Despite lingering concerns over regional geopolitical tensions and rising operational costs, businesses continue to find support in sectors like digital services, construction, and strong sales pipelines.

Supply chain logistics also saw a notable improvement, with delivery times hitting a four-month best as shipping routes through the Strait of Hormuz became more reliable. While inflationary pressures and high transport expenses persist, firms are largely absorbing these costs to stay competitive rather than raising prices for consumers. Although there was a rare dip in employment levels—the first in over four years—as companies adjusted to softer demand, the overall outlook remains optimistic. Analysts believe that as geopolitical stability improves, the pace of recovery will likely pick up, supported by ongoing public spending and a normalization of international supply chains.