The S&P Global UAE PMI rose to 54.9 in January 2026 from 54.2 in December, marking the strongest reading in nearly a year and pointing to a broad-based improvement in operating conditions. Growth was driven by a sharp acceleration in new business, which expanded at its fastest pace in almost two years as domestic demand improved and new products and services gained traction. Strong order inflows drove activity, while firms increased purchasing at the fastest pace in over six years, aided by quicker deliveries and smoother logistics. On the other hand, input prices rose at the fastest rate in 18 months, driven by higher raw material costs, wages, and operating expenses, yet competitive pressures limited selling price increases, keeping profit margins under pressure. Looking ahead, firms remain optimistic about demand. Despite inflationary headwinds, robust sales growth, improved supply chains, and positive expectations suggest the non-oil sector enters 2026 on solid footing.
