The S&P Global UAE PMI eased to 52.9 in March 2026 from 55.0 in February, matching its lowest level since mid-2021 but still signalling a modest improvement in non-oil private sector business conditions. The decline was driven by a marked slowdown in output growth, as conflict in the Middle East disrupted supply chains and dampened demand. New orders continued to expand, though at the weakest pace in seven months, with firms pointing to softer tourism activity and rising uncertainty.
Supply conditions worsened significantly, with supplier delivery times lengthening for the first time in over four years amid shipping disruptions, particularly around the Strait of Hormuz. At the same time, input costs rose sharply, leading firms to lift selling prices at the fastest rate in almost eleven and a half years. Business confidence dropped to a five-year low, reflecting concerns about prolonged disruptions, although long-term growth prospects and ongoing government spending plans continued to provide some support.