RIYADH: Non-oil business activity expanded across the UAE, Kuwait and Egypt in December, while Qatar’s private sector showed signs of stalling, economy trackers showed. 

In its latest report, S&P Global revealed that the UAE’s Purchasing Managers’ Index eased slightly to 54.2 in December from a nine-month high of 54.8 in November, remaining firmly in expansion territory. 

A PMI reading above 50 indicates an expansion in non-oil business activity, while a figure below 50 signals contraction. 

The UAE’s non-oil sector performance aligns with broader trends across the Middle East and North Africa, where economies continue to pursue diversification efforts aimed at reducing reliance on crude revenues. 

Saudi Arabia led the PMI readings in the region in December, with the Kingdom recording 57.4, supported by rising new orders, continued growth in business activity and expanding employment. 

Commenting on the UAE data, David Owen, senior economist at S&P Global Market Intelligence, said: “The UAE non-oil sector concluded 2025 with a solid upturn, marking a year of robust but somewhat tempered growth in business conditions.” 

He added: “Positively, firms finished the year with two of their best months of activity growth, as the survey data suggested that sales were rising much faster compared to their low point in August.” 

According to the report, the pace of business expansion in December was among the fastest recorded during the year, with more than a quarter of surveyed companies reporting month-on-month increases in output. 

Surveyed non-oil firms attributed the growth in activity to rising new business intake, driven by improving market conditions, supportive government policies, increased customer numbers, and stronger international demand. 

Some companies reported subdued sales, citing intensifying competition and ongoing economic uncertainty. 

“Firms took encouragement from signs of increased customer spending, rising tourism, greater technology adoption and supportive government policies,” added Owen. 

Companies also reported mounting cost pressures in December, with survey data pointing to the fastest rise in overall input prices in 15 months. 

Respondents highlighted above-average increases in salary expenses, along with higher transport and maintenance costs. 

Cost pressures also affected inventory management, with firms reporting a notable decline in stock levels. 

Employment growth remained relatively subdued at the end of the fourth quarter, with hiring only marginal and weaker than in November. 

“December was also characterized by an acceleration of cost pressures and leaner inventory strategies, indicating that many firms were feeling the pinch on their balance sheets. Additionally, reports of heightened competition and challenges in finalizing new work highlighted ongoing headwinds for the non-oil sector as it heads into 2026,” added Owen. 

Looking ahead, companies remained optimistic, although confidence eased and was among the lowest levels seen in the past three years. 

In the same report, S&P Global said Dubai’s non-oil economy ended the year on a positive note, with the emirate’s PMI at 54.3 in December, slightly down from 54.5 in November. 

Kuwait confidence at 2-year high 

In a separate publication, S&P Global said business confidence among non-oil firms in Kuwait hit a two-year high in December. 

The country’s PMI rose to 54 in December from 53.4 in November, driven by sharp and accelerated increases in output and new orders. 

Marketing activities and the launch of new products were cited as key factors supporting growth during the month. 

New orders increased for the 35th consecutive month in December, with the pace of expansion the fastest since May. 

Although employment increased, hiring was not sufficient to prevent a further build-up in backlogs of work. 

“The Kuwaiti non-oil private sector has been building growth momentum through the final quarter of 2025 and is in a strong position as 2026 gets underway. In fact, companies are buoyant about prospects for the coming year, with business optimism among the highest since the survey began in 2018,” said Andrew Harker, economics director at S&P Global Market Intelligence. 

He added: “New orders continued to flow in quickly in December, and despite efforts by companies to expand their staffing levels accordingly, backlogged work accumulated to the largest extent on record. This suggests that output will need to be ramped up further in the months ahead.” 

Egypt stays in expansion zone 

In another report, S&P Global said Egypt’s PMI eased to 50.2 in December from a 61-month high of 51.1 in November. 

The index remained above the 50 thresholds for the second consecutive month, signaling a sustained improvement in the health of the non-oil private sector. 

Firms benefited from increased new orders in December, supporting a modest expansion in output, although growth in both areas slowed compared to the previous month. 

“Improvements in order books have been a clear factor behind strong business performances over the past few months,” said Owen. 

He added: “The uplift in sales arrived amid a softening of inflationary pressures in the Egyptian economy, which has enabled businesses and consumers to spend with more confidence. Adding to signs of growth spreading, firms’ purchases of inputs increased for the first time in ten months.” 

Non-oil companies in Egypt reported a renewed decline in employment during December, with most firms citing difficulties in replacing staff who had left. 
The overall reduction in employment was the sharpest in 13 months, though it remained modest. 

Despite improving business conditions, firms expressed caution toward future activity. 

The outlook for the next 12 months was neutral in December, reflecting subdued confidence during the latter half of 2025. 

“The overall upturn in business conditions was softer in December compared to one month ago, suggesting this growth trend should be treated with caution. Firms also face continued uncertainties in the domestic and global sphere, which has made them hesitant to show optimism,” added Owen. 

Qatar PMI at 2-year low 

In another report, S&P Global said Qatar’s PMI fell to 50 in December from 51.8 in November, signaling no change in business conditions in the non-energy private sector at the end of 2025. 

The latest reading was the lowest in two years and below the long-run average of 52.2 recorded since 2017. 

According to the PMI survey, the stagnation in business conditions in December was driven by lower new orders and output. 

A reduction in stocks of purchases and shorter supplier delivery times also weighed on overall performance during the month. 

“Qatar’s non-energy private sector companies reported a stagnation in business conditions at the end of 2025, as the PMI fell to a two-year low and equalled the no change mark of 50,” said Trevor Balchin, economics director at S&P Global Market Intelligence.  

He added: “Falling new orders were registered for the ninth time in 2025, leading to a contraction in output for the seventh time during the year.”  

The report also noted that job creation among non-energy firms in Qatar remained strong at the end of 2025, although it eased to an eight-month low. 

Higher employment levels were linked to sales and marketing efforts, as well as new projects, particularly in the manufacturing sector. 

Despite declines in output and new orders in December, the 12-month business outlook remained firmly positive and strengthened from November, supported by expectations of improving market conditions, population growth, industrial development and government investment projects. 

“Looking beyond these two key metrics, however, the overall picture was more positive. Employment continued to expand strongly, while backlogs and purchasing both increased albeit at modest rates. Overall inflationary pressures remained muted despite another strong rise in wages,” said Balchin.  

He concluded: “The outlook for 2026 improved, with the Future Activity Index rising to a four-month high and approaching its long-run average.”