The UAE non-oil private sector recorded its strongest PMI reading since December 2024 in August, with the index published by S&P Global rising to 55.3 from 52.7 in July. New business rose to one of its strongest levels in more than two years, and export demand expanded for a second consecutive month, reversing a stretch of decline through the second quarter. Vendor performance improved on stronger trade flows and faster deliveries from nearby suppliers, and input price inflation eased to its lowest rate since February.
Saudi Arabia and Kuwait posted parallel gains. The Riyad Bank Saudi Arabia PMI, compiled by S&P Global, rose to 53.8 in August, its highest reading in six months and the fifth straight month above the neutral 50 mark. Output expanded at its strongest pace in seven months, though new export orders fell for a sixth consecutive month, with the pace of decline accelerating on regional tensions. Kuwait’s PMI, also compiled by S&P Global, reached 53.6, a six-month high, with output and new orders growing at their fastest pace since February.
Qatar moved in the opposite direction. Its S&P Global PMI held at 47.6 for a second straight month of contraction, with construction, services, wholesale and retail, and manufacturing all declining together. Egypt’s PMI rose to 49.6 from 46.8 in July, edging toward stabilization as output and order contractions slowed. Lebanon slipped to 50.1 from 50.7, drifting toward stagnation as private sector momentum stalled.
Export demand split along the same regional lines. The UAE and Kuwait gained from restored trade lanes and stronger cross-border demand within the GCC. Saudi Arabia’s export orders fell sharply and at an accelerated pace on regional geopolitical tensions. Lebanon logged a ninth straight month of falling international demand, and Egypt continued to face shipping delays.
Input costs stayed elevated across the region. Qatar recorded an eighth consecutive month of accelerating input price inflation, a 22-month high. Egyptian firms reported material shortages and purchasing cost spikes tied to disruption in the Strait of Hormuz. Saudi and UAE companies faced sustained outlays for fuel, logistics, and industrial intermediate goods.
Balance sheet strength shaped how firms responded to the pressure. GCC companies built pre-production inventories against maritime supply risk, with UAE firms shifting toward local suppliers. Lebanese firms cut buying to avoid holding costs, and Egypt’s purchasing activity contracted at its steepest rate in close to three years amid cash flow limits and delayed payments.
Employment and pricing diverged in turn. Saudi Arabia and Kuwait added staff to meet order backlogs, while Qatar’s job creation slowed to a 25-month low. Egypt logged its second fastest rate of job creation on record as firms prepared for upcoming projects. UAE and Saudi companies absorbed input cost increases through steady or lower selling prices under domestic retail competition, while Lebanese firms passed costs directly to clients, pushing output charge inflation toward multi-year highs.
Twelve-month business sentiment across the GCC improved to multi-month highs despite ongoing security concerns, anchored by giga-project awards, development activity, and industrial localization. Egypt’s confidence climbed to its highest level since June 2022 on expectations of development project launches. Lebanon’s sentiment reached its highest mark since February, though firms remained cautious given the political deadlock and extended regional conflict risk.
