The S&P Global UAE PMI fell to 52.9 in March 2026 from 55.0 in February, marking the joint-lowest reading since mid-2021 but still indicating a modest improvement in non-oil private sector conditions. The decline reflected a sharp slowdown in output growth, as conflict in the Middle East disrupted supply chains and weighed on demand. New orders continued to rise, though at a seven-month low, with softer tourism and rising uncertainty cited by firms.
Supply conditions deteriorated notably, with delivery times lengthening for the first time in over four years due to shipping disruptions, particularly around the Strait of Hormuz. At the same time, input costs surged, prompting firms to increase selling charges at the fastest pace in nearly 11-and-a-half years. Confidence also weakened to a five-year low, reflecting concerns over prolonged disruptions, even as long-term growth prospects and government spending plans continued to offer some support.
