The UAE Ministry of Economy and Tourism has reported non-oil GDP growth of 4.8 percent in the first quarter of 2026, with the non-oil share of the economy rising to 79.4 percent. In parallel, S&P Global released its UAE PMI for September: the headline index held at 55.3 — unchanged from August and matching a 20-month high. Two different data series — a quarterly macro report and a monthly purchasing-manager survey — add up to the same picture: the UAE's non-oil sector is expanding more durably than the oil sector in 2026, and the pace is accelerating.
For business and investors in the UAE this is not background noise, it is a working input. The Ministry's macro data drives what the country reports in IMF, World Bank and major rating-agency outlooks; PMI reflects what is actually happening with orders, employment and prices on the ground in September. Let us unpack both figures.
What the Q1 2026 macro report showed
Based on figures given by Minister of Economy and Tourism Abdulla bin Touq Al Marri at the Economic Integration Committee meeting:
- Real UAE GDP grew by 3 percent year-on-year to AED 485 billion at constant prices — Q1 2026.
- Non-oil GDP grew by 4.8 percent year-on-year — above the headline rate and above the oil component.
- The non-oil share of GDP rose to 79.4 percent in Q1 2026 against 78.0 percent for full-year 2025 — a further 1.4 percentage points in favour of diversification in a single quarter.
The minister linked the result to the resilience of the UAE's multi-sector economic model and to progress on the We the UAE 2031 agenda. For an outside reader, the more useful read is simpler: at 79.4 percent non-oil, this is already a structurally service-based economy, in which hydrocarbons account for roughly a fifth of GDP while trade, finance, construction, manufacturing and services account for the rest.
Sector mix inside non-oil GDP
Per the Ministry, the largest sectors in the UAE non-oil economy in Q1 2026 are:
- Trade — 16.9 percent of non-oil GDP. Covers domestic trade and the re-export/logistics function (Dubai as a regional hub).
- Financial and insurance services — 13.2 percent. Covers banks, DIFC, ADGM, insurers, fintech and reinsurance.
- Construction — 12.9 percent. Held high by infrastructure projects and residential development in Dubai and Abu Dhabi.
- Manufacturing — 12.8 percent. Industry 4.0, petrochemicals (on the border with the oil block), construction materials, food, light manufacturing.
Together, these four sectors deliver roughly 55.8 percent of the non-oil economy. The remainder is split across logistics and transport, real estate, tourism and hospitality, education and healthcare, professional services and the public sector. That is closer to a developed service economy than to a typical regional hydrocarbon exporter.
S&P Global UAE PMI for September: what is inside the 55.3 reading
The S&P Global United Arab Emirates PMI release for September 2026 was published on 5 October 2026. The headline index came in at 55.3 — the same reading as August, which in the release wording locks in a 20-month high. The 50.0 threshold separates growth from contraction, so the UAE non-oil private sector has now been in a confident expansion phase for an eighth consecutive month.
Inside the index there are several notable moves:
- New export orders rose for a third month, at a pace close to the strongest in almost two years. This signals that international demand for UAE services and goods is recovering after the summer cooling.
- Purchasing activity accelerated; input inventories were built at the sharpest rate in almost three years. For manufacturing and retail this means preparation for the Q4 seasonal load.
- Output charges (selling prices) are rising at the fastest pace since May 2011. One of the main signals of the release: for the first time in many years UAE non-oil companies are able to pass cost increases through to customer prices.
- Hiring is only picking up marginally — firms are expanding order books faster than teams. For the labour market this means intensified competition for qualified staff.
- Business confidence remains near recent lows — firms are working confidently with the current pipeline but are more cautious on the 12-month horizon.
David Owen, Principal Economist at S&P Global Market Intelligence, commented: "The UAE PMI held at 55.3 in September, another indication that the non-oil economy has moved past the mid-year slowdown. Businesses saw customer demand improve, not just in local markets but abroad as well, with new export business rising at the strongest rate in nearly two years."
Pricing pressure: what "fastest since 2011" actually means
The output-charges subindex deserves separate attention. More than fifteen years is not statistical noise — it is a structural shift. Through most of the post-crisis period of 2011–2024, UAE non-oil firms worked against pricing pressure in the opposite direction: input costs were rising, but passing them through to clients was often not possible — competition, saturation of the services market and customer price sensitivity held selling prices down.
What changed in 2026: new orders have held above 55 consistently since February, export demand returned, rents and wage indexation rose, and inventories of raw materials and consumables now have to be rebuilt at higher costs. In this combination, companies began to pass part of the cost increase through — and in September 2026 customers accepted it.
Practical takeaway for Garant's audience: when rebuilding 2027 business models and budgets, bake in a realistic inflation adjustment into client contracts (revisit indexation clauses), into the wage bill (local competition for staff is intensifying) and into operating costs (rent, logistics, contractor services). How this fits the broader UAE outlook — in our piece "UAE economy in 2026: diversification under stress test".
What these numbers mean for business in the UAE
For new and established companies. Non-oil growth of 4.8 percent and PMI at 55.3 mean that the inbound flow into DMCC, IFZA, Meydan, DIFC and ADGM keeps rising. Banks and regulators in 2026 are operating under elevated load — plan on 4–8 weeks to open a corporate account with full documentation, not the earlier 2–3 weeks. Operational-risk themes — account refusals, extra source-of-funds queries, licensing delays — are discussable but there is no systemic deterioration. For the choice of entry — mainland or free zone — see our piece "free zone or mainland in the UAE: how to pick a jurisdiction in 2026".
For operating hubs and regional back offices. Rising export orders for a third month and recovered pricing power in the service sector make the UAE a more attractive location for an operating hub serving MENA and South Asia. International groups that previously held back-office functions in Egypt, Jordan or India are increasingly rebuilding structures in favour of Dubai or Abu Dhabi in 2026 — factoring in the 9 percent corporate tax, free zones and infrastructure.
For investors and M&A teams. Macro resilience with non-oil growth above 4 percent lowers country risk. M&A deals, credit lines, fintech and other regulated licensing pass compliance perimeters more easily when the macro profile is stable. For larger deals the current rank matters less than the trajectory — the non-oil share of GDP has been rising for a sixth consecutive quarter.
For companies with an export product. New export orders in the UAE PMI are rising for a third month at a pace close to a two-year high. This means that external demand for UAE services and goods is recovering — Q4 is worth running actively: regular contact with existing international clients, pushes into new markets, participation in key industry events in Dubai and Abu Dhabi.
Context: where diversification is heading
The non-oil share of UAE GDP was roughly 71 percent in 2020, 78.0 percent for full-year 2025 and 79.4 percent in Q1 2026. That trajectory is roughly +1.5–2 percentage points a year, which for an economy of this scale is a visible pace of structural change. The We the UAE 2031 agenda targets a non-oil share above 80 percent by the end of the decade; at the current pace that threshold is reached as early as 2027.
Three factors drive the rise of the non-oil share, and they differ from regional peers: first, active policy on attracting foreign capital (100 percent foreign ownership in mainland, Golden Visa, simplified free-zone regulation); second, systematic investment in the infrastructure of knowledge-intensive sectors — fintech, R&D, artificial intelligence; third, UAE policy on trade agreements (CEPA) with key markets, which opens an export corridor for non-oil sectors.
The UAE PMI at 55.3 in September 2026, with rising export orders, is not a one-off number from a release. It is one more marker that the country's economic model continues to expand along the non-oil trajectory — and for any business already working in the UAE or weighing entry, this is a reason to revisit its own investment and operating decisions against the new base.
