UAE non-oil firms raise selling prices in October as input costs spiral

What happened

UAE non-oil private businesses expanded in October, while the seasonally adjusted Purchasing Managers’ Index (PMI), a survey measure of business activity, slipped to 54.8 from 55.3 in September. Firms reported input costs rising sharply and increased selling prices at the fastest rate since the survey began in August 2009.

Confirmed

Global impact / market context

Higher costs for fuel, freight, materials, rent and other inputs can reduce firms’ profit per sale. Raising customer prices may offset that pressure, but if buyers resist higher prices, demand and sales could weaken across construction, retail, tourism and manufacturing.

Analyst inference

The survey showed output growth remained strong, easing only slightly from September’s seven-month high, even as regional conflict weighed on activity. Input prices rose at their fastest rate since June 2022, while selling prices recorded their sharpest rise since the survey began.

Confirmed

What to watch

1. Check whether firms keep lifting selling prices as fuel, freight and material costs rise; successful cost recovery may protect profit per sale, while incomplete recovery can squeeze earnings. Analyst inference
2. Watch upcoming survey readings for changes in input costs and customer prices, which can indicate whether cost pressure is easing or continuing to spread through businesses. Analyst inference
3. Follow whether output growth holds up in construction, retail, tourism and manufacturing after firms raise prices, since weaker customer demand could slow activity. Analyst inference

Evidence

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