RIYADH: The UAE’s non-oil private sector recorded its fastest improvement in business conditions since December 2024 in August, while Egypt moved closer to stabilization after seven consecutive months of contraction.  The latest S&P Global Purchasing Managers’ Index surveys showed the UAE’s headline reading rising to 55.3 in August from 52.7 in July, signaling an acceleration in growth for the second consecutive month.  This comes amid continued strength in the UAE economy, with the central bank estimating real gross domestic product growth of 5.6 percent for both 2025 and 2026, supported by robust hydrocarbon and non-hydrocarbon activity.  The International Monetary Fund also said in July the UAE economy had remained resilient amid the Middle East conflict and expects growth to rebound in 2027 as hydrocarbon production rises and non-oil activity recovers, supported by normalizing tourism and trade flows.  David Owen, principal economist at S&P Global Market Intelligence, said: “Demand growth accelerated, while delivery times improved and cost pressures softened, indicating a broad-based strengthening in domestic economic conditions.”   He added: “UAE businesses are actively building supply chain resilience through localisation, with surveyed firms increasingly switching to domestic suppliers to help circumvent geopolitical disruptions. “This strategy contributed to a further reduction in delivery times and strong purchasing growth.”  Owen noted that firms increased inventories at the fastest pace in nearly three years, reflecting greater confidence in the demand outlook and efforts to guard against potential future supply disruptions. Employment, however, declined as businesses remained cautious about committing to long-term capacity expansion.  Egypt moves closer to stabilization  Egypt’s PMI also improved sharply in August, rising to a seven-month high of 49.6 from 46.8 in July.  Although the index remained below the neutral 50-point mark, the reading signaled only a marginal deterioration in non-oil private-sector business conditions, bringing the sector closer to stabilization.  The improvement comes as Egypt’s broader economy continues to recover. The IMF expects real GDP growth of 4.6 percent in fiscal year 2025/26 before moderating to 4.4 percent in FY2026/27, as the lagged effects of the Middle East conflict weigh on investment and economic activity.  “Over the past few months, we’ve seen business confidence return – expectations are now the highest seen in over four years – which has certainly helped the domestic economy to rebound,” Owen said.   He noted that firms were sufficiently encouraged to resume hiring, resulting in an increase in employment that was the second-fastest in the survey’s history.  “Moreover, this was all achieved despite a slight uptick in input cost inflation in August, linked to the recent rebound in global oil prices, although we may see a lagged effect on business activity if customers respond negatively to the sharp increase in output charges,” he added.