The S&P Global United Arab Emirates Purchasing Managers’ Index (PMI) fell to 53.3 in May 2025, down from 54 in both March and April. This decline marks the lowest level recorded since September 2021, indicating a slowdown in the growth of the non-oil private sector.

Despite this moderation, companies continued to experience strong client demand. However, some firms noted that competitive pressures and weaker trade, particularly due to US tariffs, were factors negatively impacting growth. The growth rate of new orders slowed but remained robust, while output also grew, albeit at the slowest rate seen in nearly four years.

The growth in input purchasing reached its weakest level in 28 months, leading to a significant reduction in inventories, which was the fastest cutback on record. On a brighter note, employment levels rose to their highest point in a year, although the growth in backlogs of work eased to a 16-month low.

Regarding prices, input cost inflation slowed to its lowest rate since December 2023. However, selling prices increased for the fifth consecutive month. Optimism among businesses softened to its weakest level since January, with only about 10% of firms anticipating growth in the upcoming year.