In July 2024, Saudi Arabia's non-oil sector saw a decline in growth, with the Purchasing Managers' Index (PMI) dropping to 54.4, its lowest since January 2022, reflecting reduced new orders and output growth. Despite favorable demand conditions, increased competition and challenging weather led to price reductions, impacting overall margins. Meanwhile, the UAE's non-oil sector also experienced a slowdown, with its PMI falling to 53.7, the lowest since September 2021, due to rising input costs and capacity pressures. Both countries faced challenges from competitive dynamics, with Saudi Arabia's GDP contracting by 0.4% year-on-year in Q2, primarily due to declining oil activities. Despite these hurdles, economists suggest that ongoing demand and government initiatives for economic diversification may sustain non-oil growth in the region. However, the long-term prospects remain uncertain as lower oil revenues could limit investment capabilities.