The UAE's non-oil private sector expanded only modestly in May as war in the region and the effective closure of the Strait of Hormuz weighed on output and new business growth, a business survey showed on Wednesday.
The seasonally adjusted S&P Global UAE Purchasing Managers' Index rose to 52.6 in May from 52.1 in April, remaining above the 50 mark separating growth from contraction.
"The continued cut-off to maritime trade had a cascading effect through the UAE economy in May... Export orders declined in May, driven by both the actual shipping disruption as well as the continued sense of uncertainty over how long the conflict will last," Reuters quoted David Owen, principal economist at S&P Global Market Intelligence, as saying.
Input deliveries were delayed to the greatest extent since the height of the COVID-19 pandemic in April 2020, Owen said.
Output growth accelerated to a three-month high but remained weaker than the survey's long-run average. New business also rose only modestly, close to April's 62-month low, while export sales contracted again, though the pace of decline eased markedly.
The new orders subindex inched up to 52.6 in May from April's 52.5.
Backlogs of work increased at the slowest pace in nearly three years as firms found more capacity to clear outstanding orders, but job creation eased to its weakest pace since October 2025 and cost pressures remained elevated on higher material and transport costs.
But surveyed businesses remained optimistic about the year-ahead outlook.
The UAE's non-oil GDP grew 6.8% in 2025 from a year earlier, outperforming overall GDP growth at 6.2% last year.
