Saudi Arabia’s non-oil sector expanded at its fastest pace in six months, driven by rising new orders and higher output. The seasonally adjusted Riyadh Bank Saudi Arabia Purchasing Managers’ Index (PMI) climbed to 57.8 from 56.4, reflecting improved operating conditions across the private sector.
Firms reported a marked increase in new orders, benefiting from robust domestic demand, international client growth, and competitive pricing strategies. Consequently, companies increased production to meet workloads efficiently. Strong demand at home and abroad pushed the new order subindex to 63.3, compared with 60.1 in the previous month.
Output growth accelerated at the quickest rate since February, showing that companies responded swiftly to increased demand. Steady hiring helped firms manage workloads, ensuring staff could maintain productivity levels while adapting to market pressures. Employment growth remained solid, although the related subindex dipped slightly.
Naif Al-Ghaith, Riyad Bank’s chief economist, said, “September’s survey highlights a resilient private sector navigating cost pressures while benefiting from firm demand and steady hiring.” His statement underscores the non-oil sector’s ability to adapt and expand under evolving market conditions.
Saudi Arabia’s government expects real GDP growth of 4.4% in 2025, with the sector growth projected at 5%. Rising domestic consumption and improved employment contribute to this expansion. In addition, upcoming large-scale infrastructure projects are likely to provide further momentum for companies operating in the non-oil sector.
Meanwhile, input price inflation eased to a six-month low. Although higher wages and supplier costs remain factors, firms managed operations efficiently while maintaining output growth. Optimism about future activity strengthened as companies anticipated growing demand and new business opportunities.
Furthermore, the non-oil sector benefits from expanding international client relationships. Companies continue to leverage competitive pricing and quality improvements to capture market share. Transitioning smoothly between higher orders and output, the sector demonstrates agility and resilience.
Overall, Saudi Arabia’s non-oil sector shows strong and sustainable growth. Domestic and international demand, combined with steady hiring and efficient cost management, ensure continued momentum for the private sector.
