GCC Non-Oil PMIs Diverge in July as Kuwait Returns to Growth at 50.8
Non-oil business conditions across the Gulf moved in different directions in July, according to S&P Global PMI surveys released on 4 and 5 August 2026. Kuwait returned to growth after four months below the 50.0 no-change mark, the United Arab Emirates accelerated, Saudi Arabia eased slightly while staying firmly in expansion, and Qatar improved but remained in contraction.
| S&P Global PMI, non-oil private sector | July 2026 | June 2026 | Release |
|---|---|---|---|
| Saudi Arabia (Riyad Bank) | 53.1 | 53.3 | 4 August |
| United Arab Emirates | 52.7 | 50.8 | 5 August |
| Kuwait | 50.8 | 46.4 | 4 August |
| Qatar | 48.5 | 47.6 | 4 August |
Kuwait recorded the largest month-on-month improvement in the group, a rise of 4.4 points that took the index above 50.0 for the first time since February. Output and new orders both increased for the first time in five months, although export orders continued to decline. The release stated that “staffing levels stabilised in July, thereby ending a four-month sequence of job cuts.” Charges rose for the seventeenth month running, but at a slower pace than in June, with input prices lifted by building materials, maintenance, marketing, rent and transportation. Firms were optimistic about the coming twelve months for the first time since the start of the regional conflict, supported by increased air travel and planned promotional activity. Andrew Harker, Economics Director at S&P Global Market Intelligence, described the data as showing “a return to growth in Kuwait’s non-oil private sector” and “renewed optimism in the future.”
The United Arab Emirates posted the second-largest gain, up 1.9 points to 52.7. New orders grew at the fastest rate since February and export work rose for the first time since March, while employment returned to growth. Input costs rose sharply and remained elevated, but output prices increased only mildly. Inventories fell despite a sharp rise in purchasing activity. David Owen, Principal Economist at S&P Global Market Intelligence, said that “July data signalled some relief for UAE companies.”
Saudi Arabia remained the strongest reading in the group at 53.1, easing from 53.3 in June in a fourth consecutive month of expansion. Around 19 percent of firms reported higher output against roughly 4 percent reporting a decline. Export orders fell for a fifth consecutive month, though the pace of decline eased, and workforce expansion was modest and well below the rates seen in early 2026. Input price inflation was the slowest in four months while staff costs rose at their strongest pace in five. Output prices increased sharply but marginally more slowly than in June. Expectations softened from June’s five-month peak, with only around 8 percent of firms anticipating growth. Naif Al-Ghaith PhD, Chief Economist at Riyad Bank, said that “Saudi Arabia’s non-oil economy continued to demonstrate resilience in July.”
Qatar improved to 48.5 from 47.6, a five-month high, but stayed below the neutral mark. New orders fell for an eighth month, though at the slowest rate since February, while employment reached a three-month high and extended a run of job creation lasting close to two years. Cost pressure is the distinguishing feature of the Qatari survey: input price inflation accelerated for a survey-record seventh month running and was the strongest since October 2024, while output charges rose for a fourth consecutive month at the fastest pace since December 2022, led by construction and manufacturing. Trevor Balchin, Economics Director at S&P Global Market Intelligence, noted that “the PMI remained on a recovery path in July, rising to a five-month high.” The Qatar survey covers around 450 non-energy firms and was collected between 9 and 24 July.
Why it matters: The common thread across the four surveys is cost rather than demand. Input prices rose in all four economies in July, and in Qatar the sequence of increases is now a survey record, whereas the labour signals diverge: employment returned to growth in the United Arab Emirates, reached a three-month high in Qatar on a run of job creation lasting close to two years, expanded modestly in Saudi Arabia and stabilised in Kuwait after four months of cuts. Three of the four indices rose over the month and the fourth remains comfortably in expansion. On our reading, the stabilisation of Kuwaiti employment and the first optimistic twelve-month outlook since the regional conflict began are the most significant single data points in the set, while persistent input cost pressure remains the constraint on how quickly the recovery converts into hiring and investment.
Looking ahead: August PMI readings for the four economies are due in early September. The immediate question is whether Kuwait can hold above 50.0 for a second month and whether Qatar’s eighth month of falling new orders finally reverses.
Sources: S&P Global, Kuwait PMI, 4 August 2026; S&P Global, Qatar PMI, 4 August 2026; Riyad Bank Saudi Arabia PMI, S&P Global, 4 August 2026; S&P Global, United Arab Emirates PMI, 5 August 2026.
