The UAE’s non-oil business growth experienced a slowdown in May, reaching its weakest pace in nearly four years. Despite this moderation, the nation’s overall Gross Domestic Product (GDP) soared to Dh1.776 trillion in 2024, largely propelled by robust expansion in its non-oil sectors.
UAE Non-Oil Sector Sees Slowdown Amidst Strong GDP Growth
Growth in the UAE’s non-oil private sector decelerated in May, with the S&P Global Purchasing Managers’ Index (PMI) falling to 53.3 from 54.0 in April. This marks the lowest reading since September 2021, indicating the slowest expansion in output in 44 months. While demand remained strong, competitive pressures and international trade factors, such as US tariffs, were cited as contributing to the softened momentum. This follows a similar trend observed in March, where the non-oil private sector also saw moderated growth.
- May PMI: 53.3 (down from 54.0 in April)
- Lowest reading since September 2021
- Slowest output expansion in 44 months
- New order growth softened to a seven-month low
Economic Resilience: Dh1.776 Trillion GDP in 2024
Despite the recent slowdown in non-oil business growth, the UAE’s economy demonstrated remarkable strength in 2024. The real GDP reached Dh1.776 trillion, a 4 percent increase from the previous year. This impressive growth was primarily driven by the non-oil sectors, which expanded by 5 percent to Dh1.342 trillion, accounting for 75.5 percent of the total GDP. Oil-related activities contributed Dh434 billion.
- Total GDP 2024: Dh1.776 trillion
- Non-Oil GDP 2024: Dh1.342 trillion (5% growth)
- Non-Oil Sector Contribution: 75.5% of total GDP
Diversification Strategy Fuels Sectoral Growth
The UAE’s economic diversification strategy has been instrumental in its robust GDP performance. Several non-oil sectors exhibited significant growth in 2024:
- Transport and Storage: 9.6% year-over-year increase, driven by record airport traffic (147.8 million passengers).
- Building and Construction: 8.4% growth, supported by substantial urban infrastructure investments.
- Financial and Insurance Activities: 7% growth.
- Hospitality (Hotels and Restaurants): 5.7% expansion.
- Real Estate: 4.8% growth.
Among the non-oil sectors, trade remained the largest contributor to GDP at 16.8 percent, followed by manufacturing (13.5 percent) and financial and insurance services (13.2 percent). The construction sector contributed 11.7 percent, and real estate activities accounted for 7.8 percent of non-oil GDP. These figures underscore the success of the UAE’s strategic shift towards an innovative, knowledge-based, and sustainable economic model, aligning with the ‘We the UAE 2031’ vision to raise national GDP to Dh3 trillion.
Sources
- UAE non-oil business sector growth slows in March, PMI shows, Reuters.
- UAE non-oil business growth slows in May, PMI shows, Reuters.
- UAE non-oil business sector expands robustly in January, PMI shows, Reuters.
- UAE economy hits Dhs1.776tn as non-oil sectors drive growth, Gulf Business.
- UAE non-oil business activity growth picks up in October, PMI shows, Reuters.
