RIYADH: Non-oil private-sector conditions diverged across the Middle East in September, with the UAE holding at a 20-month high and Kuwait extending its expansion for a third month, while Egypt and Qatar remained in contraction.
According to the latest Purchasing Managers’ Index reports by S&P Global, the UAE’s PMI was unchanged at 55.3 in September, while Kuwait’s reading stood at 52.4, down from 53.6 in August.
Egypt’s PMI fell to 47.2, from a seven-month high of 49.6 in August, pointing to a sharper deterioration in non-oil private-sector business conditions.
Qatar’s PMI declined to 47.3 from 47.6, extending the downturn in its non-energy private sector to seven months.
The PMI data come as the war involving the US, Israel and Iran continues to disrupt regional trade and shipping, with uncertainty around the Strait of Hormuz and Red Sea adding to costs and weighing on business activity.
UAE demand strengthens
New orders continued to rise markedly in the UAE, although the pace eased from August’s seven-month high.
Export business expanded for a third consecutive month and at the fastest rate since November 2024, while employment also returned to growth after declining in August, although the increase was slight.
David Owen, principal economist at S&P Global Market Intelligence, said: “UAE 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.”
Kuwait extends expansion
In Kuwait, output and new orders rose solidly, although growth slowed from August, with firms citing marketing efforts and competitive pricing as key factors supporting new business.
New export orders increased for a second consecutive month, reaching a seven-month high.
Business confidence strengthened for a third month to its highest level since February, supported by plans to expand product ranges and expectations of fewer restrictions on air travel.
Employment rose modestly for a second consecutive month, while outstanding business accumulated for a third month. Input prices increased at their fastest pace since February, although output-price inflation eased as some companies offered discounts.
Egypt downturn deepens
In Egypt, output and new orders fell sharply, with weaker demand attributed to market conditions, geopolitical disruptions and inflationary pressures.
Purchases declined for a sixth consecutive month, although the pace of contraction was the slowest since May, while inventories fell for a third month.
Employment, however, increased for a second month in a row as companies sought to expand staffing capacity and address rising backlogs.
“Egyptian firms remain hopeful about the future in spite of the economic challenges they face,” Owen said, adding that several of those challenges were linked by respondents to the Middle East conflict.
Qatar remains in contraction
Qatar’s non-energy private sector weakened further in September, with business activity declining for the ninth time in 10 months and at the fastest pace since March.
Firms cited weaker market conditions, reduced demand, the ongoing regional conflict and operational issues.
New orders contracted for a 10th consecutive month, with the pace of decline the sharpest since June.
Despite the continued downturn, the 12-month outlook remained positive and strengthened from August. Companies attributed the improvement to expectations of better market conditions, hopes for a resolution to the regional conflict, planned investment and government initiatives.
