The UAE PMI for October shows the non-oil economy still growing strongly, but with companies raising their prices faster than at any time in the survey’s 17-year history. The S&P Global UAE Purchasing Managers’ Index eased to 54.8 from 55.3 in September, Reuters reported, while selling charges rose at the fastest rate since the survey began in August 2009. For businesses in the UAE, the picture is one of busy order books, slightly fewer staff and rising costs that are now being passed on to customers.
The short version
- The UAE PMI fell to 54.8 in October from 55.3, still well above the 50 mark that separates growth from contraction.
- New orders rose faster than in September, and new export work grew at the quickest rate in two years.
- Input cost inflation reached its highest since June 2022, driven mainly by raw materials, fuel, energy and freight; selling prices rose at a record pace.
- Employment dipped slightly, the third fall in five months, as some firms cut staff to control costs.
What happened
The October survey of the UAE’s non-oil private sector, published by Reuters on 4 November, found that output growth stayed strong, easing only marginally from September’s seven-month high. Firms cited gains in construction, retail, tourism and manufacturing. Demand strengthened as companies won new clients and repeat business.
The standout finding was on prices. “Output prices across the UAE non-oil private sector rose at the fastest rate in the survey’s history in October, as input cost inflation quickened to its highest since June 2022,” said David Owen, principal economist at S&P Global Market Intelligence, according to Reuters. Firms said higher purchase prices for raw materials, fuel, energy and freight were the main drivers.
UAE non-oil growth stays strong, a touch below its late-summer peak
S&P Global UAE PMI, points above the 50 no-change mark, July to October 2026
Why it matters
The PMI is the earliest monthly reading on the non-oil economy, which CBRE estimates at 79% of UAE output. A reading near 55 points to solid growth, but October’s survey shows the cost of that growth rising. When firms pass costs on at a record pace, the effect reaches every business that buys goods and services in the UAE, and eventually households. Fuel is part of the picture: UAE fuel prices for November were cut by 24 fils a litre, which may ease some transport costs this month, although the survey was collected before that cut took effect.
The knock-on effects
First order: suppliers reprice
Procurement teams are likely to see more price-increase notices and shorter quote validity, especially for materials, freight and energy-intensive inputs. Firms on fixed-price contracts carry the gap until they can renegotiate.
Second order: capacity is tight
Reuters reported that backlogs rose sharply again as some firms trimmed staff to control costs, although backlogs grew at the softest pace in three months. Rising orders with fewer staff can mean longer delivery times for customers and more work for recruiters and outsourcing firms.
Third order: households and rates
Some firms already flagged weaker discretionary spending. Because the dirham is pegged to the US dollar, the Central Bank of the UAE broadly follows the US Federal Reserve on interest rates, so local price pressure is absorbed through margins and household budgets rather than local rate changes. Easing housing costs, such as falling Dubai rents in 2026, may offset part of the squeeze for residents. This is Knock-On analysis.
Who could benefit
- Exporters, with new export work growing at the fastest rate in two years.
- Construction, retail, tourism and manufacturing firms, which reported output gains.
- Companies with pricing power that can pass on costs without losing customers.
- Recruitment and outsourcing firms serving businesses with rising backlogs.
Who may face pressure
- Small firms on fixed-price contracts facing higher input costs.
- Freight-heavy and energy-intensive businesses, where the cost rises are concentrated.
- Discretionary retailers, if households cut back as prices rise.
What to watch
- Late November 2026: UAE fuel prices for December, a direct input for transport and delivery costs.
- Early December 2026 (expected): the November UAE PMI, to see whether record price rises persist.
- December 2026: the US Federal Reserve’s next rate decision, which the Central Bank of the UAE usually tracks. Air traffic is another gauge of demand, as in our report on the Sharjah Airport expansion.
Sources
- Reuters (via Investing.com), UAE non-oil firms raise prices at record pace in October, PMI shows, 4 Nov 2026
- S&P Global, S&P Global UAE PMI: UAE non-oil sector records fastest growth since December 2024 (August 2026 release), 3 Sep 2026
- Arabian Business, Dubai property prices fall 1% and rents drop 7% as Abu Dhabi apartment prices rise 13%, 4 Nov 2026 (CBRE estimate of the non-oil share; September PMI of 55.3)
This is analysis, not investment advice. Figures are as of 4 November 2026.
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