UAE Firms Experience Fastest Price Hike Since 2011 Due to Shipping Disruptions

May 5, 2026

95 min

May 5, 2026 05:32

UAE firms raise prices at fastest pace since 2011 after shipping disruption hits orders

## Price Increases Amid Shipping Challenges

In April, non-oil companies in the UAE raised their prices at the most rapid rate since June 2011. This surge was driven by increased costs in oil, transport, and shipping, which have been exacerbated by disruptions in shipping routes. These factors have put significant pressure on business margins, leading to a slowdown in new orders.

## Decline in Business Conditions

The S&P Global UAE Purchasing Managers’ Index (PMI) fell to 52.1 in April from 52.9 in March, indicating the weakest improvement in operating conditions since February 2021. Although the index remains above the growth threshold of 50, the pace of expansion has slowed, with export orders and domestic sales growth both declining.

## Impact on Exports and Output

Export orders experienced a significant drop, the steepest since the survey began in 2009, excluding the COVID-19 pandemic period. This decline was largely due to shipping disruptions linked to regional conflicts. Despite ongoing projects, the overall output growth has softened compared to earlier in the year.

## Cost Management Strategies

In response to rising costs and softer sales, businesses have been cautious with their expenditures. Input purchases increased only slightly, and hiring slowed, with workforce numbers growing at the weakest rate in 2026. Some firms even reported wage cuts as they attempt to manage expenses.

## Dubai's Economic Performance

Dubai's non-oil private sector also faced challenges, with its PMI dropping to 51.6 in April, marking the lowest level in 55 months. The city saw a slowdown in output and new business growth, influenced by regional conflicts affecting spending and supply lines.

## Optimism for Future Growth

Despite current challenges, UAE non-oil firms remain optimistic about future growth. Expectations for output rose to a three-month high in April, driven by strong business opportunities and technological advancements. Companies anticipate continued expansion over the next year, supported by robust sales pipelines and construction activities.

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