The Purchasing Managers’ Index (PMI) in the UAE held steady at 54 in April, indicating a significant improvement in business conditions.
According to a survey released on Monday, businesses in the UAE’s non-oil sector ramped up hiring in April 2025 to alleviate capacity constraints and foster new growth.
The seasonally adjusted S&P Global UAE PMI remained at 54 in April, consistent with March’s figure and signaling a robust enhancement in operating environments. The growth in new orders and increased hiring was tempered by a notable improvement in delivery times from suppliers, typically interpreted as a sign of weakening conditions.
“The PMI results for April reflect a significant rise in recruitment activities within the non-oil private sector. After a period of modest payroll increases despite a surge in sales, job creation reached its highest level in almost a year,” commented David Owen, senior economist at S&P Global Market Intelligence.
Surge in New Orders Drives Backlogs Higher
Employment levels in the non-oil sector experienced their most substantial rise in 11 months, following a period of subdued hiring since late last year. Many businesses attributed their increased workforce to a heightened need to manage work volumes, which have been elevated since early 2024.
“Companies indicated that this surge in hiring was primarily driven by efforts to tackle backlogs, which increased significantly but at a slower pace than in the previous six months. Nevertheless, overall employment growth remained modest, suggesting some companies may face challenges in attracting talent,” added Owen.
The latest data indicates that backlog accumulation has eased to a six-month low, though it remains considerable overall. Delays in transactions also hindered project completions, as reported by survey participants.
In several instances, businesses noted that a rise in new orders contributed to increased backlogs. Total new orders saw a sharp uptick, with growth accelerating from March’s figures. This was partly attributed to the most substantial increase in international demand in five months, alongside reports of gaining domestic customers.
Growth in Business Activity
The survey further highlighted that business activity within the UAE’s non-oil sector experienced a strong increase in April, though the momentum showed signs of slowing, reaching a seven-month low. Input purchases at non-oil companies also rose significantly, as firms noted increased demand for materials and components. The growth was sharp but lessened from March’s peak, the highest in 68 months.
“The PMI figure of 54.0, unchanged from March, indicates that fundamental business conditions continue to improve markedly. Companies are optimistic that strong demand levels and robust project pipelines, highlighted by rising backlogs, will drive future activities,” Owen remarked.
Additionally, the survey data pointed to improved supplier performance at the onset of the second quarter, with delivery times shortening at their fastest rate since last August, largely due to vendors enhancing their capacity.
Despite the rise in input purchases and improving delivery times, stock levels remained relatively unchanged for the second consecutive month. Gains at some firms were counterbalanced by losses at others.
Note: Saudi Arabia’s non-oil sector hiring increases, showing sustained growth momentum.
Rising Prices for Inputs and Labor Costs
Input costs within the UAE’s non-oil sector saw another rise in April, consistent with overall trends, as companies reported increases in both purchasing and labor expenses. Prices charged by firms also went up, although at a slower pace compared to March, with many firms citing competitive pressures as a reason to offer lower prices to customers.
Looking ahead, businesses expressed confidence that robust sales pipelines and strong market conditions would bolster future activity. This optimism increased for the third consecutive month, marking the highest level of confidence recorded in 2025 to date.