The UAE’s non-oil economy is experiencing its worst period since the COVID-19 pandemic, with the private sector at its weakest in more than five years, and employment falling faster than at any time since 2020.
The Purchasing Managers’ Index compiled by S&P Global — which measures activity in the non-oil private sector — fell to 50.8 in June, only just above the 50-point threshold that separates growth from contraction. It was the lowest reading since February 2021 and a reflection of weak demand, disrupted supply chains, and rising costs due to the Iran war. Improved trade flows through the Strait of Hormuz in June eased the pressures, but S&P warned that any rebound may take time to materialize.
In contrast, Saudi Arabia’s non-oil PMI rose to 53.3 points in June, its highest since February. Confidence among investors and domestic consumers in the kingdom appears relatively strong. The indices for Kuwait and Qatar remained below the 50-point mark.