The S&P Global UAE PMI slipped to 50.8 in June 2026 from 52.6 in May, indicating the weakest improvement in non-oil private sector business conditions since February 2021. Output expanded at its slowest rate in five years, as geopolitical tensions in the Middle East, cautious client spending, and strong competitive pressures constrained growth. New business rose at a three-month high but remained well below its long-run average, with clients deferring spending decisions and tourism activity still muted. Employment fell for the first time in more than four years, marking the steepest decline since August 2020. In contrast, purchasing activity recovered after May’s drop as firms moved to rebuild inventories. Input cost inflation stayed elevated, reflecting higher transport charges and rising commodity prices. Despite the softer current performance, overall business sentiment was broadly unchanged, underpinned by secured contracts and ongoing government investment.