The S&P Global UAE Purchasing Managers' Index (PMI) climbed to 54.9 in January 2026 from 54.2 in December, registering the highest level in nearly a year and signaling a comprehensive enhancement in business conditions. This growth was primarily fueled by a significant upturn in new business, which expanded at its swiftest rate in almost two years due to strengthened domestic demand and the successful launch of new products and services. The influx of strong orders propelled business activity, while companies ramped up purchasing at the fastest rate seen in over six years, supported by more efficient deliveries and improved logistics. However, input prices saw their steepest rise in 18 months, as raw material costs, wages, and operational expenses increased. Despite these cost pressures, competitive market dynamics prevented substantial hikes in selling prices, thereby squeezing profit margins. Looking forward, businesses remain optimistic about demand. In the face of inflationary challenges, the non-oil sector is poised to enter 2026 on a strong trajectory, bolstered by strong sales growth, enhanced supply chain efficiency, and positive outlooks.