Robust demand and heightened business activity fuelled the UAE's non-oil private sector growth to its fastest pace in nine months in December, according to a survey by S&P Global released on Monday.

The seasonally adjusted S&P Global UAE Purchasing Managers' Index (PMI) climbed to 55.4 in December, up from 54.2 in November, marking the third consecutive monthly increase and staying above the 50.0 threshold that separates growth from contraction.

The survey highlighted a significant increase in new business, with the new orders subindex rising to 59.3 from 58.0, reflecting strong demand.

However, export demand growth slowed, with the export subindex dropping to a seven-month low.

Backlogs of work continued to grow quickly, signalling pressure on capacity, Gulf Business reports.

“Capacity levels remain under considerable stress, illustrated by another marked increase in backlogs of work,” according to David Owen, senior economist at S&P Global Market Intelligence.

“While margin constraints appear to be holding some firms back from recruiting more staff… there is certainly a need to boost resources to ensure firms capitalise on demand in the new year,” he added.

Furthermore, despite increased demand, employment growth remained slow, with job creation at one of the weakest rates in over two-and-a-half years. 

However, input cost inflation eased to its lowest level since March 2024, offering some relief to businesses. Many companies continued to offer discounts due to intense competition.

Moreover, regardless of strong growth, business confidence remained low, indicating that companies are cautious about future conditions. 

Indeed, in Dubai, the UAE’s commercial hub, the headline PMI increased to 55.5 in December from 53.9 in November, reflecting the strongest growth in operating conditions in nine months.