RIYADH: Non-oil business growth across the Middle East and North Africa slowed in April, with the UAE losing momentum and Kuwait and Egypt remaining in contraction, S&P Global data showed.
The UAE’s Purchasing Managers’ Index slipped to 52.1, down from 52.9 in March, marking the softest improvement in operating conditions in more than five years, although still above the 50 threshold that separates growth from contraction.
Kuwait’s headline PMI was unchanged at 46.3 in April, signaling shrinking non-oil business activity, while Egypt’s reading dropped to 46.6 from 48 recorded in the previous month.
The widespread slowdown has occurred against the backdrop of rising regional tensions triggered by the outbreak of war between the US, Israel, and Iran in late February.
The conflict has disrupted shipping routes and, in some cases, airspace operations, while significantly increasing economic uncertainty across the Gulf region.
David Owen, senior economist at S&P Global Market Intelligence, said: “The UAE non-oil private sector signalled a further loss of momentum in April, with operating conditions showing their weakest performance for more than five years.”
He added that heavy restrictions on key shipment routes resulted in a marked drop in UAE exports in April, while rising cost pressures placed businesses under additional strain.
According to the report, UAE non-oil private sector companies reported a historically sharp mark-up in their selling prices in April, as further cost increases and supply disruptions stemming from the Middle East conflict compressed margins.
“Firms are looking to limit the impact where possible, with slowdowns in purchasing and hiring growth and even some reports of wage cuts, but a broad increase in price pressures is nevertheless still likely to dampen customer spending across the economy more widely,” said Owen.
S&P Global added that weaker tourism activity and client hesitancy resulted in a further slowdown in sales growth during April. Consequently, the overall rise in new business was modest and the slowest observed in more than five years.
Non-oil firms operating in the UAE reported an increase in output that was softer than at the start of the year, although the expansion remained solid overall.
On a positive note, many companies cited progress on existing projects and infrastructure developments.
Regarding the future outlook, non-oil firms were more upbeat about output projections for the coming 12 months, driven by strong business opportunities, sales pipelines and technological innovation.
In the same report, S&P Global revealed that Dubai’s PMI in April stood at 51.6, down from 53.2 in March, marking a 55-month low.
Input cost pressures continued to accelerate in April in Dubai, driven by higher oil, transport and material prices.
The report added that output and new business growth softened again in April, as the Middle East conflict continued to deter spending and restrict supply lines.
Kuwait PMI
In another report, S&P Global revealed that non-oil companies in Kuwait continued to face challenging business conditions as a result of the war in the region during April.
According to the survey, new orders, business activity, employment and purchasing activity decreased for the second consecutive month in April, while supply-chain disruption remained evident.
“There was little respite for non-oil firms in Kuwait during April as the impacts of the war in the region continued to hamper operations. New orders actually fell more quickly than in March, leading to further reductions in output, employment and purchasing,” said Andrew Harker, economics director at S&P Global Market Intelligence.
In Kuwait, the rate of decline in new orders quickened from the previous month to the fastest since May 2021. As new orders declined, companies also posted a reduction in backlogs of work, which fell solidly in April.
Amid rising pressure and lower demand, non-oil companies in Kuwait also scaled back their purchasing activities and inventory holdings.
“Based on the anecdotal evidence from the survey, one of the biggest issues facing firms in April was the continued airspace closure through most of the month. The reopening of the airspace on the 23rd should therefore help matters and we may see an improvement in next month’s data release,” added Harker.
Egypt PMI
Egypt’s non-oil private sector saw a sharp deterioration in business conditions in April, as rising price pressures significantly weighed on both new orders and output.
Last month, non-oil firms in the country reportedly curtailed their purchases of inputs and reduced their headcounts in response to tightened budgets driven by higher costs for fuel and materials.
“April PMI data indicated that activity slowed and price pressures quickened across the domestic non-oil sector, as the Middle East conflict continued to disrupt global supply chains and drive sharp increases in fuel and material prices for Egyptian companies,” said Owen.
He added: “Cost pressures reached their most marked level in over three years, prompting a stronger rise in selling prices.”
Amid heightened price pressures and falling demand, surveyed companies reported that input shortages contributed to weakened output levels.
The report further said that supply shortages and international shipping delays led to longer vendor delivery times for the first time in 2026, although the increase was only marginal.
Non-oil companies showed only subdued optimism about output over the coming year. Panellists expressed cautious hopes that market conditions would improve and that disruptions caused by the Middle East conflict would ease.
The latest sentiments, however, represent a modest recovery from March, when business expectations had turned negative for the first time in the survey’s history.
Qatar PMI
Qatar’s non-energy sector also witnessed a substantial setback in April due to regional tensions, with the country recording a PMI of 46.4.
Even though the PMI edged up from 38.7 in March, the reading still indicates contraction of non-hydrocarbon business activities in the nation.
According to S&P Global, the level of incoming new business received by Qatari firms contracted again in April, while falling intakes of new work continued to weigh on overall activity levels.
“The Qatari non-energy economy continued to face disruption in April, reflecting uncertainty due to the conflict and ongoing regional instabilities. New orders continued to fall sharply, leading to another decline in total business activity and sustained pessimism regarding the next 12 months,” said Trevor Balchin, economics director at S&P Global Market Intelligence.
With new orders continuing to decline, companies reduced their purchasing activity for the fourth month running, while stocks of inputs contracted at the steepest rate since May 2020.
Regarding the future outlook, non-energy companies in Qatar expressed pessimism, citing factors including the ongoing conflict, weak investor confidence and general uncertainty.
