Latest news with #Riyad Bank
The National
05-08-2025
- Business
- The National
Surge in hiring in Saudi Arabia, despite slower regional non-oil business growth
The rate of hiring in Saudi Arabia rose sharply in July in response to strong domestic demand, despite slower non-oil business activity growth in the region's biggest economies. The Riyad Bank Purchasing Managers Index report dropped to 56.3 in July, from 57.2 in June, but remained well above the 50 mark that separates growth from contraction in the non-oil private sector. However, the rate of business activity growth eased to its lowest since January 2022. "Saudi Arabia's non-oil economy remained on a solid growth track in July, supported by higher output, new business and continued job creation," said Naif Al-Ghaith, chief economist at Riyad Bank. The latest survey showed a historically steep rise in employment at the Arab world's second-biggest economy, as companies responded to higher activity and new orders by hiring more staff in July, the report said on Tuesday. This followed June's fastest uplift in job numbers over the past 14 years. Increased hiring was driven partly by a rise in backlogs of work, as some businesses found existing contract work and constrained capacity held up the completion of new orders, the report said. "Employment conditions are expected to stay supportive, helping firms manage future workloads," Mr Al-Ghaith said. However, input cost pressures continued as wages and purchasing prices continued to rise, prompting companies to raise selling prices, particularly in services, construction and manufacturing, he added. The International Monetary Fund estimated Saudi Arabia's economy will expand at a 3.6 per cent pace in 2025 and 3.9 per cent in 2026, supported by the continued phase-out of Opec production cuts. The kingdom is expected to keep its non-oil growth above 3.5 per cent over the medium term, which mirrors the positive effects led by its Vision 2030 economic programme, the Washington-based lender said. In July, non-oil companies' output grew on the back of existing projects and incoming new orders that helped to sustain growth, according to qualitative survey reports. However, output growth eased to its lowest rate in three and half years due to higher competition and lower customer footfall, the survey said. Orders also grew, driven by domestic demand and increased efforts by sales teams to fulfil orders. However, companies faced difficulties in attracting new foreign clients, leading to a decrease in new export orders for the first time in nine months. Cost pressures eased slightly in July, despite steep rises in labour costs. Salary expenses rose sharply, underlined by efforts to retain workers and offer bonuses. Looking ahead, expectations for future business activity in July "softened notably" from June's two-year high, although in general businesses expect output to increase due to "resilient market conditions" and strong client demand, the report said. Overall optimism was the lowest recorded since July 2024. UAE growth Meanwhile in the UAE, non-oil business conditions grew at their weakest level since June 2021 as geopolitical tension weighed on sales, according to S&P. The seasonally adjusted S&P Global UAE Purchasing Managers' Index dropped to 52.9 in July, from 53.5 in June, the report on Tuesday said. "New order volumes helped firms to expand, but this trend is declining, with the latest data indicating the softest rise in incoming new work in almost four years," said David Owen, senior economist at S&P Global Market Intelligence. Companies partly attributed this slowdown to the Israel-Iran tension that flared in June, which made some clients hesitant to spend. They also highlighted weaker tourism activity and headwinds from global trade disruption. Firms blamed more crowded markets for the increasing difficulty in securing new orders. "Should regional tensions ease, we may see a recovery in sales growth in the coming months," Mr Owen said. "Nevertheless, the ongoing trends of rising competition, limited inventory, constrained hiring growth and relatively low confidence among surveyed firms suggest that downside risks remain elevated.' Despite the demand slowdown, companies received higher new orders in July compared to the previous month but the upturn was the least amount recorded since August 2021. July data showed softening of job growth at non-oil companies in the UAE. Employment rose slightly, marking the weakest uplift in four months, coinciding with a steeper rise in backlog orders. In Dubai, the business and tourism hub of the Middle East, the non-oil sector showed a solid recovery, with its PMI rising to 53.5 in July from 51.8 in June, driven by a sharper improvement in sales volumes. The outlook Looking ahead, UAE non-oil companies remained optimistic in July, driven by hopes of strengthening demand levels. However, the degree of confidence eased slightly, as some companies highlighted risks stemming from global economic uncertainty and heightened competition. In Egypt, non-oil business conditions deteriorated for the fifth consecutive month in July, but the decline was less severe than in June. This was because companies reported softer contractions in activity and new orders, while employment increased for the first time in nine months, according to the S&P Global Egypt PMI report. The headline PMI rose to 49.5 in July from 48.8 in June, remaining below the 50 mark. The outlook for business remained at a historically subdued level in July, as companies continued to express concerns about demand strength and broader economic uncertainty, the report said. Optimism in July improved only slightly from June's record low.
Arab News
05-08-2025
- Business
- Arab News
Saudi Arabia's non-oil growth stays strong despite softer July PMI
RIYADH: Saudi Arabia's non-oil business activity continued to expand in July, even as growth momentum softened, with the Purchasing Managers' Index easing to 56.3, down from 57.2 in June, a market tracker showed. Compiled by S&P Global for Riyad Bank, the PMI remained well above the neutral 50-point threshold, signaling ongoing improvement in private sector operating conditions. The robust growth in Saudi Arabia's non-oil business activity aligns with the broader goals of Vision 2030, which aims to diversify the Kingdom's economy and reduce its reliance on oil revenues. This comes as Saudi Arabia's economy grew by 3.9 percent year on year in the second quarter of 2025, driven by strong non-oil sector performance, according to flash estimates released last month by the General Authority for Statistics. Naif Al-Ghaith, chief economist at Riyad Bank, said: 'Saudi Arabia's non-oil economy remained on a solid growth track in July, supported by higher output, new business, and continued job creation. Although the headline PMI edged down to 56.3 from 57.2 in June, the reading still pointed to a healthy level of activity across the private sector.' He added: 'Firms continued to benefit from ongoing project work, resilient domestic demand, and focused marketing efforts, even as some indicators showed signs of cooling compared to earlier in the year.' Al-Ghaith noted that the slight dip in the headline index was primarily due to a moderation in new order growth. He said businesses were still experiencing improved demand, though 'competitive pressures and more cautious client spending weighed on the pace of expansion.' He also pointed out that external demand was softer and that purchasing activity had increased at a slower pace. On the employment front, Al-Ghaith said firms continued to expand their workforce to support rising activity, with 'July marking another solid month of hiring as companies worked to keep operations running smoothly.' He further noted that firms expect growth to continue over the coming year, underpinned by steady demand, strong pipelines, and Vision 2030-linked investments. Employment is expected to remain supportive, although rising input costs and wages led to price hikes — especially in services, construction, and manufacturing. The PMI report also showed that non-oil private sector output grew strongly in July, driven by ongoing projects and new orders. However, the pace of expansion was the slowest in three and a half years. Order books continued to develop, buoyed by solid domestic demand and active sales efforts. However, growth was partially offset by intensifying competition, lower footfall, and the first drop in export orders in nine months, as firms faced challenges in attracting new foreign clients. In response to rising activity and backlogs, firms recorded another sharp increase in hiring, following June's 14-year employment peak. The uptick was attributed to capacity constraints and growing workloads. Inventory levels rose significantly in July, particularly among manufacturers and wholesale and retail firms, even as new input purchases slowed. Delivery times improved but at a slower rate, in part due to customs delays. Input prices in the Kingdom's non-oil sector increased strongly during the month — albeit at a slightly slower pace than in the second quarter — driven by steep salary hikes to retain staff. This contributed to a rise in selling prices for the second straight month.
Zawya
05-08-2025
- Business
- Zawya
Saudi PMI slips to in July as business activity expansion hits lowest level in over 3 years
Saudi Arabia's Purchasing Managers' Index (PMI) slipped in July with business activity expansion hitting its lowest level in 3.5 years in the non-oil sector, and optimism at the lowest recorded level since July 2024. The Riyad Bank Saudi Arabia PMI slipped to 56.3 in July, down from 57.2 in June, on the back of a slowdown in new orders growth and business confidence easing, according to the survey. Higher competition and lower customer footfall weighed on businesses further, while some panellists reported difficulties in gaining new foreign clients, leading to a decrease in new export orders for the first time in nine months. While July recorded inventory growth amongst manufacturers and wholesale and retail firms, new input purchases rose at a much slower pace compared to June. Delivery times shortened on balance; however, the rate of improvement eased sharply due to customs delays. Despite concerns, work on existing projects and incoming new orders helped to sustain growth, the report added. 'Businesses continued to see improved demand, but competitive pressures and more cautious client spending weighed on the pace of expansion,' Naif Al-Ghaith, Chief Economist at Riyad Bank, said. 'External demand was also softer, while purchasing activity rose at a slower pace.' Non-oil sector firms reported an uplift in employment levels in July, citing domestic demand conditions, signalling 'the fastest uplift in over 14 years,' the report said. Input price pressures across the Saudi Arabian non-oil sector was strong during July, the survey stated, although the rate of inflation slowed slightly from the second-quarter average. Rising input costs resulted in a markup in prices charged for the second month running. Expectations for future activity softened notably from June's two-year high in July. Al-Ghaith said firms expect activity to pick up over the coming year, supported by steady demand, strong pipelines, and ongoing investment tied to Vision 2030. (Writing by Bindu Rai, editing by Brinda Darasha)
Reuters
05-08-2025
- Business
- Reuters
Saudi non-oil private sector adds jobs despite easing output growth
Aug 5 (Reuters) - Saudi Arabia's non-oil private sector expanded robustly in July, albeit at a slower pace than the previous month, as job creation surged in response to strong domestic demand, the Riyad Bank Purchasing Managers Index report showed on Tuesday. The headline PMI reading fell to 56.3 in July from 57.2 in June, remaining well above the 50.0 threshold that indicates growth in activity. 'Saudi Arabia's non-oil economy remained on a solid growth track in July, supported by higher output, new business, and continued job creation," said Naif Al-Ghaith, Chief Economist at Riyad Bank. Firms recruited staff to manage higher workloads and new orders. The survey noted another historically steep rise in employment, following June's record growth in job numbers over the past 14 years. Output growth eased to its lowest rate since January 2022, as firms reported challenges such as higher competition and lower customer footfall. Additionally, new export orders fell for the first time in nine months, highlighting difficulties in gaining foreign clients. Cost pressures softened slightly, with input price inflation slowing from the second-quarter average. However, labour costs continued to rise steeply as companies offered bonuses to retain workers. Despite the slowdown, businesses remain optimistic about future activity, supported by resilient market conditions and strong client demand. However, overall optimism was the lowest recorded since July 2024.
Arab News
03-07-2025
- Business
- Arab News
Saudi PMI rises to 57.2 in June as non-oil sector hits 3-month high
RIYADH: Saudi Arabia's non-oil private sector expanded at its fastest pace in three months in June, supported by rising domestic demand, accelerated hiring, and a pickup in purchasing activity, a survey showed. According to Riyad Bank's Purchasing Managers' Index compiled by S&P Global, the headline PMI rose to 57.2, up from the 55.8 figure recorded in May, signaling a strong improvement in business conditions and surpassing the long-run average of 56.9. The index remains well above the neutral 50 mark, indicating sustained expansion across the Kingdom's non-oil economy. The robust growth in Saudi Arabia's non-oil business activity aligns with the broader goals of the Vision 2030 program, which seeks to diversify the Kingdom's economy and reduce its reliance on oil revenues. Saudi Arabia's PMI for June outpaced that of its regional peers, with the UAE and Kuwait recording readings of 53.5 and 53.1, respectively. Naif Al-Ghaith, chief economist at Riyad Bank, said: 'The latest reading reflects a strong improvement in overall business conditions, supported by higher output levels, rising demand, and an active labor market.' He added: 'Firms largely linked the pickup in activity to improving sales, new project starts, and better demand conditions, although the pace of output growth was softer compared to previous highs.' In May, a report released by Saudi Arabia's General Authority for Statistics revealed that the Kingdom's gross domestic product grew 2.7 percent year on year in the first quarter, driven by strong non-oil activity. Commenting on the GDP figures at the time, Minister of Economy and Planning Faisal Al-Ibrahim, who also chairs GASTAT's board, noted that the contribution of non-oil activities to the Kingdom's economic output reached 53.2 percent — an increase of 5.7 percent from previous estimates. The minister also added that the Kingdom's economic outlook remains positive, supported by structural reforms and high-quality, state-led projects across various sectors. In its latest PMI report, S&P Global stated that non-oil firms in the Kingdom reported a further rise in new orders in June, with the rate of growth continuing to accelerate from its recent low in April. Companies that participated in the survey noted that the acquisition of new clients and the benefits of enhanced marketing had improved demand growth across non-oil sectors. 'New orders continued to lead the expansion, registering the fastest growth in four months and surpassing the long-run trend. Businesses credited this increase to stronger demand, effective marketing strategies, and improved client acquisition,' added Al-Ghaith. According to the report, non-oil private companies in Saudi Arabia hired staff at the fastest rate since May 2011, as firms expanded teams to manage increased workloads. This historically strong increase continued a robust period of job creation seen since the start of 2025, with companies citing high demand for skilled staff as a driving force behind intensified recruitment efforts and increased salary offers. Consequently, overall staff costs rose at the fastest pace since the survey began in 2009. Purchasing activity accelerated to a two-year high as firms responded to rising input needs, with nearly 40 percent of respondents increasing their purchases. Input prices also rose sharply, aligning with the trend observed in the second quarter of the year. This compelled companies to pass on higher costs to customers, although some businesses opted to reduce prices as part of competitive pricing strategies. Despite price pressures, non-oil firms in Saudi Arabia remained confident of an uplift in activity over the next 12 months, with sentiment ticking up to a two-year high. S&P Global stated that this optimism for future growth was largely driven by resilient domestic economic conditions, robust demand, and improving sales pipelines. 'On the future outlook, sentiment among non-oil businesses remains highly positive. Confidence about future activity climbed to a two-year peak, supported by healthy order pipelines and stronger domestic economic conditions. However, cost pressures became more pronounced in June,' said Al-Ghaith. He noted that staff costs had risen at a record pace as firms sought to retain talent, while purchase prices recorded their fastest increase since February, partly due to stronger demand and rising geopolitical risks. 'Despite these cost challenges, firms broadly raised their selling prices, reversing the declines seen in May and signalling an improved ability to pass on higher costs to customers,' said Al-Ghaith. The PMI survey data were collected from around 400 private sector companies across the manufacturing, construction, and wholesale sectors, as well as retail and services.
