UAE Non-Oil Private Sector Activity Improves in February 2026, Driven by Tourism, Digital Trade, and Accelerated Hiring

Dubai | EcoPulse24

Data from the UAE’s non-oil private sector Purchasing Managers’ Index (PMI) indicated a modest improvement in February 2026, signaling ongoing expansion in economic activity outside the energy sector. The index reached 55.0 points, up from 54.9 in January, marking its highest level in a year. A reading above 50 points signals improving business conditions and expanding economic activity in the private sector.

This improvement was largely driven by a strong increase in new orders, with many sectors benefiting from robust activity in tourism, e-commerce, and rapid adoption of artificial intelligence applications. The resulting demand supported trading activity and boosted company performance.

Operationally, firms experienced higher business volumes due to increased new orders, prompting them to expand hiring at the fastest pace since November. This hiring uptick reflects growing business confidence about future demand.

Companies also benefited from improved supply chains and faster delivery times, enabling more efficient inventory management and production. Easier access to raw materials and faster shipments supported operational efficiency.

On the pricing front, data showed relatively moderate inflationary pressures, with input costs rising at their slowest pace since October. This was partially supported by lower fuel prices compared to previous periods. Selling prices to customers continued to rise slightly for an eighth consecutive month, as businesses sought to cover operating costs while balancing profit margins and competitiveness.

Businesses continued to build inventories amid improved supply chains and delivery speeds, enhancing their ability to meet rising demand without facing bottlenecks.

Looking ahead, companies expressed optimism about the economic outlook for the coming months, citing strong local demand, improved logistics, and ongoing economic and investment projects. The start of 2026 is expected to deliver positive momentum for the non-oil private sector, though some global inflationary pressures may affect production costs in the medium term.

EcoPulse24 Analysis:
The continued expansion of the UAE’s PMI underscores the resilience of the non-oil economy and its ability to generate demand and activity independently of energy market fluctuations. Improvements in supply chains and strong demand in tourism and technology reflect a gradual shift in the country’s growth drivers, supporting the role of economic diversification in maintaining stability amid global changes.