Saudi Arabia’s economy showed steady momentum in August, with the non-oil private sector expanding at a slightly quicker pace. The latest survey confirmed that business activity improved as new orders rose, strengthening overall confidence in the non-oil sector in Saudi Arabia.
The Riyad Bank Saudi Arabia Purchasing Managers’ Index (PMI) climbed to 56.4 in August compared to 56.3 in July. The figure remained well above the neutral 50.0 mark, which indicates growth. Analysts highlighted that stable demand, rising orders, and employment gains all supported the sector’s resilience.
Naif Al-Ghaith, chief economist at Riyad Bank, explained that improving demand conditions and a rebound in output growth fueled the expansion. He noted that employment also recorded further gains, signaling positive momentum for businesses. Although growth has slowed compared to earlier peaks this year, the underlying trend remains strong.
The survey revealed that new orders accelerated, supported by improved economic conditions across the Kingdom. New export orders also rose, driven by stronger marketing activities and collaborations within the Gulf Cooperation Council. This marked the fastest rebound in four months, underscoring renewed confidence in trade performance.
Additionally, the subindex for new orders increased to 60.1 in August from 59.7 in July. Companies expanded sales teams and initiated fresh projects to meet rising demand. Inventory growth also reached its highest level in four months as firms prepared to handle stronger order flows.
However, challenges persisted. Firms reported higher input costs due to global inflationary pressures and increased purchasing expenses. Consequently, selling prices rose for the third straight month as companies sought to manage cost burdens while maintaining operations.
Despite these pressures, business confidence improved significantly from July’s 12-month low. Outlooks for future output strengthened, reflecting optimism among firms operating in the non-oil sector in Saudi Arabia. Companies anticipate further opportunities for growth, supported by domestic reforms and regional partnerships.
Overall, August demonstrated resilience in the Kingdom’s diversification journey. By sustaining progress, the non-oil sector in Saudi Arabia continues to reinforce its role as a vital driver of long-term economic growth.
