Dubai, UAE – Non-oil businesses in the UAE raised their selling prices in October at the fastest rate since the survey began in August 2009, according to the latest S&P Global UAE Purchasing Managers’ Index (PMI).
The headline numbers
- UAE PMI: 54.8 in October, down from 55.3 in September. Any reading above 50 signals growth
- Selling prices: the sharpest increase in the survey’s history
- Input costs: the fastest rise since June 2022
- Dubai PMI: up to an eight-month high of 54.6, from 54.5
Why prices are rising
Companies said they were paying more for raw materials, fuel, energy and freight, as well as for maintenance, storage and rent. After months of absorbing these costs to protect their margins, many firms are now passing them on to customers. Economists warn this points to higher inflation risk in the fourth quarter, especially after recent increases in petrol and diesel prices.
Demand stays strong
Despite the cost pressure, business activity remained healthy. New orders grew faster than in September, and new export work rose at its quickest pace in two years. Firms reported gains in construction, retail, tourism and manufacturing, and business confidence improved to its highest level since January.
Hiring was the weak spot. Employment slipped slightly for the third time in five months as some companies focused on controlling costs, even while their backlogs of work kept growing.
What it means for businesses
The survey suggests demand in the UAE is still solid, but customers may become more price-sensitive if costs keep climbing. Dubai firms reported a similar record rise in selling prices, alongside a sharp increase in new business.
