Businesses in the UAE’s non-oil sector increased employment levels at a stronger pace in April 2025 in a bid to ease capacity pressures and support new business growth, a survey showed on Monday.

The seasonally adjusted S&P Global UAE Purchasing Managers’ Index (PMI) was at 54 in April, unchanged from March and indicative of a solid strengthening of operating conditions. Faster increases in new orders and employment were offset by a greater improvement in supplier delivery times, which is normally associated with weaker conditions.

“The April PMI results signalled a notable uptick in hiring activity across the non-oil private sector. After several months of mild increases in payroll numbers, despite robust sales growth, job creation rose to its highest level in 11 months,” stated David Owen, senior economist at S&P Global Market Intelligence.

Increase in new work pushes backlogs up

Staff numbers across the non-oil economy rose at the sharpest rate in 11 months. This followed a relatively subdued period of job creation, especially since the final quarter of last year. Surveyed businesses typically related higher employment to a growing need to address workloads, which the survey data indicated have been elevated since early 2024.

“Firms signalled this was mainly done as part of efforts to reduce their backlogs, which rose sharply but at the softest pace in six months. That said, employment growth was still modest overall, adding to suggestions that some firms may be struggling to recruit,” added Owen.

The latest figures showed the rate of backlog accumulation easing to a six-month low, albeit remaining steep overall. Transaction delays also hampered work completion, according to panellists.

In many cases, businesses also signalled that an increase in new work had pushed backlogs higher. Total new orders rose sharply, with the rate of growth accelerating from March. This was partly due to the strongest upturn in international demand for five months, while companies also reported gaining domestic clients.

Business activity grows

The survey also revealed that business activity across the UAE’s non-oil sector rose markedly in April, although momentum continued to weaken to a seven-month low. There was also a considerable increase in input purchases at non-oil firms, as panellists reported growing demand for materials and components. The rate of growth was sharp, but softened from March’s 68-month peak.

“The headline PMI’s reading of 54.0, which was unchanged from March, signals that underlying business conditions are still improving robustly. Firms are also hopeful that elevated demand levels and strong pipelines, as characterised by steeply rising backlogs, should propel activity higher in the coming months,” added Owen.

Elsewhere, the survey data signalled a stronger improvement in supplier performance at the start of the second quarter. Lead times shortened at the fastest pace since last August, which firms mainly attributed to efforts at vendors to increase their capacity.

Despite input purchases rising and delivery times shortening, stock levels were broadly unchanged for the second consecutive month. Growth at some firms was offset by reductions elsewhere.

Read: Saudi Arabia non-oil sector employment climbs, reflecting continued growth momentum

Prices rise on purchasing, staff costs

Input prices in the UAE’s non-oil sector increased again during April. The rise was in line with the series trend, as companies reported uplifts in both purchasing and staff costs. Prices charged were also raised, but at a slower pace than in March, with many panellists citing efforts to offer lower prices to customers amid strong competition.

Looking ahead, firms remained confident that sales pipelines and resilient market conditions would support activity going forward. The degree of confidence ticked up for the third month running and was the best recorded in 2025 so far.