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The S&P Global survey placed the UAE non-oil private sector PMI at 52.9 in March, indicating expansion for another month despite the effects of the Iran war that began on February 28. The index fell from 55 recorded in February but remained above the 50 threshold that separates growth from contraction. Customer demand weakened and both output and new orders grew at slower rates while selling prices increased at the fastest pace since June 2021 as supply chains came under strain from the closure of the Strait of Hormuz, according to the data.
S&P Global figures showed that businesses faced difficulties securing inputs, resulting in a build-up in backlogs of work and prompting some additional hiring although the rate of job creation eased. International orders rose modestly while project work continued without major interruption. The survey highlighted that input cost pressures accelerated across areas including logistics, fuel and raw materials with the overall rate of increase the sharpest since July 2024.
According to senior economist David Owen at S&P Global Market Intelligence, anecdotal evidence indicated that tourism, retail and logistics sectors experienced the greatest effects from the conflict while technology and construction registered softer but still significant impacts. Owen stated, “For many firms, orders books were resilient and output expanded.” He added that although firms displayed high levels of uncertainty with activity expectations at a 61-month low they took comfort from strong long-term growth projections and fiscal spending plans including Abu Dhabi’s Economic Vision 2030.
The Ministry of Economy reported that non-oil activities accounted for a record 77.3 per cent of real GDP in the first quarter of 2025 when they expanded by 5.3 per cent. Full-year data for 2025 from the Federal Competitiveness and Statistics Centre placed non-oil GDP growth at 6.8 per cent as the sector reached Dh1.5 trillion. An International Monetary Fund assessment found the UAE maintains substantial fiscal buffers that support economic stability amid regional tensions.
Dubai authorities announced a Dh1 billion stimulus package focused on the tourism and hospitality industry following the PMI release. S&P Global Ratings affirmed the UAE’s credit rating citing the economy’s resilience to the war’s effects. The Central Bank of the UAE introduced a resilience package allowing banks greater liquidity access and flexibility in capital buffers to underpin lending.
Later PMI readings from S&P Global placed the index at 52.6 in May and 50.8 in June showing the expansion continued but at a moderating pace as geopolitical tensions persisted. The average PMI for 2025 stood near its long-term trend of 54 according to S&P Global compilations. S&P Global analysts noted that confirmed contracts and government investment helped sustain business confidence despite the challenges.
