UAE Firms Raise Prices at Record Pace as Business Costs Surge

Non-Oil Sector Continues to Expand

The UAE's non-oil private sector continued to record solid growth in October, although businesses faced increasing pressure from higher operating expenses.

The latest Purchasing Managers' Index (PMI) report showed that the headline reading eased to 54.8 from September's level but remained comfortably above the 50-point mark, which indicates expansion.

Despite steady business activity, companies increased their selling prices at the fastest rate recorded in the survey.

The trend reflects growing pressure on businesses as they attempt to manage rising expenses.

Higher Fuel and Material Costs Affect Businesses

Companies reported paying more for fuel, energy, raw materials, freight, maintenance, storage and rent during October.

Many businesses responded by passing some of these additional expenses on to customers to protect their profit margins.

Higher petrol and diesel prices were also identified as important factors behind the increase.

The rise in selling prices could add to inflationary pressure in the UAE during the final quarter of 2026, even as companies continue to benefit from healthy demand.

Dubai Records Strong Business Activity

Dubai's non-oil private sector recorded an improvement in business conditions, with its PMI increasing slightly to 54.6 in October from 54.5 in September.

The reading marked an eight-month high, supported by stronger new orders and growing output.

New business volumes increased at their joint-fastest pace since February, while export orders reached their strongest growth rate in two years.

Companies linked higher activity to sectors including construction, retail, tourism and manufacturing.

Business Confidence Improves Despite Cost Pressures

Purchasing activity also increased at its fastest pace in nine months as companies worked to meet rising demand.

Businesses reported improved supplier performance and greater use of local vendors amid disruptions to maritime trade routes.

Although input costs continued to climb, confidence about the coming year improved to its highest level since January.

Companies expressed optimism about future demand and the possibility of better regional conditions, suggesting that the UAE's non-oil business sector remains resilient despite inflation concerns.