The UAE Private Sector Starts 2026 with the Highest Growth in 11 Months
The UAE private sector began 2026 by achieving the fastest growth rate in 11 months, marked by a significant increase in new business and production expectations. This prosperity reflects improved market conditions and rising demand, bolstering economic hopes for a brighter future.
Significant Improvement in the Purchasing Managers’ Index
Non-oil producing companies in the UAE have experienced dynamic growth since the beginning of 2026, as the Purchasing Managers’ Index (PMI) rose from 54.2 in December 2025 to 54.9 in January 2026. This increase is the highest in 11 months, demonstrating a notable improvement in the private sector’s conditions.
Business activity continued to grow in January, maintaining a steady growth rate compared to December. Many survey participants reported that the increase in new business was a major driver of this economic upturn, along with positive signals from sectors such as real estate and technology.
Notable Increase in Purchases and Orders
The expansion in the non-oil sector was not limited to new business; it also included a marked increase in the volume of incoming orders. Purchase orders surged sharply in January, recording the fastest growth rate in 22 months, indicating a strong shift in the private sector.
Despite the acceleration in sales growth, companies faced challenges in achieving high profit margins due to competition. However, data revealed the highest increase in purchasing production inputs in six and a half years, contributing to inventory buildup.
Great Optimism in Future Expectations
With the rise in inventory levels and improved supply chains, optimism is growing among non-oil producing companies about their future. Business expectations improved to their highest level in 15 months, with most survey participants anticipating continued improvement in conditions and demand growth.
In Dubai, companies witnessed significant improvements in the operating environment at the beginning of 2026. The main PMI rose to 55.9, with new business growth reaching its highest level in 22 months. This recovery contributed to increased hiring and inventory accumulation.
Positive Signals from Experts
David Owen, Senior Economist at S&P Global Market Intelligence, stated, “The UAE’s non-oil economy has started the new year on solid foundations, with a sharp rise in new orders prompting companies to significantly increase production and expand their purchases.” He emphasized the importance of this boom in stimulating employment and raising inventory levels.
The UAE private sector continues to develop its activities and increase production in line with rising demand, indicating an optimistic start to 2026.