The UAE’s non-oil private sector experienced a significant boost in July, signaling a positive shift in economic momentum. According to the latest S&P Global Purchasing Managers’ Index (PMI), the sector climbed to 52.7, up from the near-stagnation seen in June. This recovery is largely attributed to a surge in new orders, bolstered by stronger client demand and renewed confidence in domestic infrastructure projects. Notably, businesses have begun expanding their workforces again after a period of contraction, reflecting an overall improvement in market sentiment and a stabilization of regional trade flows.

However, the path to growth remains complex as companies navigate persistent inflationary pressures. While demand has picked up, businesses are still grappling with higher costs for essentials such as fuel, shipping, and raw materials. Competitive market conditions have limited the ability of firms to pass these rising costs onto consumers, keeping price inflation relatively modest. Despite these challenges, the outlook remains cautiously optimistic, with Dubai showing similar signs of improvement as its local PMI rose in tandem with the national average, driven by a resilient rebound in customer activity.