UAE's non-oil sector hiring grows fastest in 11 months

Khaleej Times

20-05-2025

The UAE's non-oil private sector showcased remarkable resilience in April 2025, with employment growth hitting an 11-month high, signalling a vibrant economic landscape driven by rising demand and strategic workforce expansion.
According to the latest S&P Global UAE Purchasing Managers' Index (PMI), which held steady at a robust 54.0, the sector continued its upward trajectory, firmly above the 50.0 growth threshold. This sustained performance underscores the UAE's successful diversification efforts, reducing reliance on oil and fostering a dynamic non-oil economy.
The standout feature of April's PMI was the sharp uptick in job creation, the fastest since May 2024. David Owen, senior economist at S&P Global Market Intelligence, noted, 'After months of modest payroll increases despite strong sales, hiring activity surged as firms addressed mounting workloads.'
Businesses reported a pressing need to tackle backlogs, which, while still significant, eased to a six-month low. This hiring spree reflects the sector's response to sustained demand, with new orders rising sharply, fuelled by a five-month peak in international demand and growing domestic client bases.
The UAE's non-oil sector is a cornerstone of its Vision 2030, aiming to build a knowledge-based economy. Employment growth in sectors like technology, tourism, and finance is pivotal, with the UAE's strategic investments in free zones and innovation hubs attracting global talent. In 2024, the non-oil sector contributed over 70 per cent to the UAE's GDP, and this latest data suggests continued momentum.
The surge in hiring also aligns with government initiatives like the Emiratisation program, which encourages private-sector employment of UAE nationals, further bolstering local workforce participation.
Despite the robust hiring, challenges persist. Owen highlighted that 'employment growth remained modest overall, with some firms struggling to recruit.' Transaction delays and competitive pressures also slowed work completion, though supplier performance improved, with delivery times shortening at the fastest pace since August 2024. This reflects vendors' efforts to scale capacity, supporting firms grappling with rising input demands.
Business activity, while still strong, dipped to a seven-month low, tempered by intense competition and rising input costs. Companies reported increased purchasing and staff costs, though many opted to lower prices to attract customers, resulting in a slower rise in output prices compared to March. Input purchases surged, driven by demand for materials, though stock levels remained stable as growth at some firms was offset by reductions elsewhere.
Looking ahead, UAE businesses are optimistic about sustained growth. Confidence in future activity rose for the third consecutive month, reaching its highest level in 2025. Firms cite strong sales pipelines and resilient market conditions as key drivers. The UAE's strategic position as a global trade hub, coupled with initiatives like Expo 2020's legacy projects and the Comprehensive Economic Partnership Agreements (CEPAs), continues to attract investment and spur non-oil activity.
This employment-driven growth in the UAE's non-oil sector highlights its economic diversification success. As firms navigate recruitment challenges and competitive pressures, the sector's ability to sustain hiring and manage backlogs will be crucial analysts said.
With global demand rising and domestic policies fostering innovation, the UAE is poised to maintain its position as a leading non-oil economy in the region, they said.