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UAE business activity set to accelerate in Q3 2026, says Standard Chartered
Bank cites softer oil prices, job market recovery and rising investment as key drivers, as normalising regional trade flows lift outlook for the non-oil economy
- PUBLISHED: Mon 6 Jul 2026, 5:43 PM UPDATED: Mon 6 Jul 2026, 6:49 PM
The UAE’s business activity is expected to gain fresh momentum in the third quarter of 2026 as easing regional tensions shift focus to the pace of the GCC’s economic recovery, according to Standard Chartered.
In its latest economic analysis released on Monday, the bank said the UAE’s June S&P Global Purchasing Managers’ Index (PMI) held above the 50-point expansion threshold even during the most intense phase of the recent regional conflict, with non-oil growth driven mainly by domestic consumption and investment. The external sector, it said, should recover gradually as regional trade flows return to normal.
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“The UAE’s latest PMI reading reinforces the resilience of its non-oil economy and private sector activity through a period of regional uncertainty. Domestic consumption and investment continue to support growth, while the gradual recovery in external demand provides a more constructive outlook for the third quarter. These trends reflect the depth of the UAE's economic fundamentals and its continued role as a leading hub for trade, investment and capital flows,” said Rola Abu Manneh, CEO for the UAE, Middle East and Pakistan at Standard Chartered.
Three drivers for Q3
Standard Chartered expects three factors to underpin stronger momentum through the third quarter, led by softer oil prices, a recovering job market, and accelerating investment growth as regional governments continue prioritising diversified trade corridors.
The global bank’s analysis also pointed to a near-full recovery in the UAE’s oil exports, aided by the partial reopening of the Strait of Hormuz and the earlier rerouting of crude shipments – even as wider regional oil exports recover at a slower pace.
The forecast follows a softer June reading for the UAE’s non-oil private sector. The headline PMI eased to 50.8 in June from 52.6 in May, the weakest reading since February 2021, though it remained above the neutral 50-point threshold separating expansion from contraction. Dubai's own non-oil PMI followed a similar pattern, easing to 50.7 from 52.0, even as output growth in the emirate hit its fastest pace since March.
S&P Global had noted that supply-chain conditions were already improving by June, with supplier delivery times improving at their fastest pace in four months following smoother shipping movement through the Strait of Hormuz – a trend that dovetails with Standard Chartered's more upbeat Q3 outlook.
Trade flows normalising after Hormuz disruption
The bank’s reference to normalising regional trade builds on a period of significant disruption earlier in the year. Following the US-Iran ceasefire and the reopening of the Strait, UAE shipping and logistics executives had welcomed the development but warned that freight rates remained sharply elevated and supply chains would take months to fully recover. Industry executives had described container shipping costs surging several-fold during the conflict before beginning to ease.
On the energy side, tanker-tracking data cited by Bloomberg showed the UAE’s crude and condensate shipments rising roughly 30 per cent in a single month to more than 3.9 million barrels a day, underscoring how quickly the country's oil exports rebounded even before the Strait fully normalised – a point that aligns with the bank’s assessment of a “near full recovery” in UAE oil exports.
