Economic activity in the UAE’s oil private sector slowed in March 2025, according to the S&P Global Business Activity Index. The Purchasing Managers’ Index (PMI) fell from 55.0 in February to 54.0 in March, the lowest reading in six months. While a reading above 50 still indicates overall growth, the pace of growth has slowed markedly, which could signal caution in the business environment, Reuter has reported.
Analysts say that amid global economic uncertainty, UAE businesses are facing new challenges. According to David Owen, senior economist at S&P Global Market Intelligence, some companies are no longer able to meet their previously planned sales targets. This may indicate a gradual cooling of demand or a change in the situation in certain sectors of the economy, especially in sectors sensitive to global trade and logistics costs.
New orders grow more slowly
The growth rate of new orders decreased for the third consecutive month, and the corresponding sub-index fell to 56.3 – the lowest value since October last year. Despite the slowdown in demand, companies continued to increase purchases to reduce the volume of unfulfilled orders. Purchasing activity in March grew at the fastest pace since July 2019, which demonstrates the desire of companies to maintain the pace of fulfilling obligations.
However, the positive dynamics in purchases is not supported by a similar increase in employment. On the contrary, job growth in March was the weakest in almost three years. Some companies report difficulties in recruiting qualified personnel, which also affects the overall efficiency of production processes. Against this backdrop, input prices continue to rise moderately, although some companies are recording a decrease in transport costs, which partially offsets the overall pressure on margins.
Indicators in Dubai
The situation in the country’s business center – Dubai – is generally in line with the national dynamics. The business activity index in the emirate fell to 53.2, which was the lowest figure in the last five months. Although new orders continued to grow, their pace also slowed, and the labor market recorded a decrease in jobs for the first time in a long time.
This situation forces businesses to carefully review their strategies for the coming months. The slowdown, although moderate, could have tangible consequences for the trade, logistics and services sectors. However, despite the caution, the overall expectations of entrepreneurs for the coming year remain positive – primarily due to national investment programs and continued consumer demand, especially in emirates with strong infrastructure.