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Business Recorder
7 days ago
- Business
- Business Recorder
Saudi Arabia's non-oil private sector growth accelerates in May, PMI shows
ABU DHABI: The expansion in Saudi Arabia's non-oil private sector activity quickened in May, driven by accelerated growth in new orders, while business confidence also strengthened, a survey showed on Tuesday. The seasonally adjusted Riyad Bank Saudi Arabia Purchasing Managers' Index (PMI) rose to 55.8 in May from 55.6 in April, firmly in growth territory even though it remains below the peak of 60.5 seen at the beginning of the year. New order volumes rebounded strongly in May from an eight-month low in April, attributable to increased demand, strong sales performance, and new marketing initiatives. New export orders also grew, albeit at the slowest pace in seven months. The new order subindex jumped to 62.5 in May from April's 58.6 reading. But the pace of output growth eased to its softest since September 2024. The construction sector led the rise in both activity and new business, according to the survey. Saudi Arabia launches company to develop artificial intelligence under PIF 'On the domestic front, firms increased hiring to match rising output needs, while purchasing activity saw its fastest growth since March 2024, supported by improved vendor delivery times and a more agile supply chain,' Naif Al-Ghaith, Riyad Bank's chief economist said. Input prices rose sharply, driven by increased supplier charges for raw materials. However, competitive pressures led firms to reduce selling prices, particularly in the services sector, despite higher costs. The degree of business optimism improved significantly, with confidence among respondents reaching an 18-month high, as companies cited expansion plans and improved demand conditions.
Arab News
05-05-2025
- Business
- Arab News
Saudi Arabia's non-oil sector growth continues in April as PMI hits 55.6
RIYADH: Saudi Arabia's non-oil private sector continued to expand in April, with the Riyad Bank Purchasing Managers' Index reaching 55.6, indicating sustained growth in business activity, a new survey showed. According to the latest Riyad Bank Saudi Arabia PMI report compiled by S&P Global, the April reading marked a slight drop from 58.1 in March but remained comfortably above the neutral 50.0 mark that separates expansion from contraction. Despite the marginal decline, Saudi Arabia's PMI for April was still higher than the UAE's reading of 54.0 and Kuwait's 54.2. Naif Al-Ghaith, chief economist at S&P Global Market Intelligence, said: 'As of April 2025, Saudi Arabia's non-oil economy continues to assert itself as a pivotal component of the nation's economic landscape.' He added: 'The diversification efforts have continued to bear fruit, underscoring the Kingdom's strategic shift away from oil dependency toward a more balanced and sustainable economic framework.' The PMI survey signalled a strong increase in employment levels across the non-oil private sector in April. The rate of hiring growth accelerated to its joint-fastest pace in ten and a half years, matching the level recorded in October 2023, as companies expanded their staffing capacity in response to rising sales and increased activity. As a result, staff cost inflation surged to a record high in April, reversing the slowdown in cost pressures seen in March. 'Employment in the non-oil private sector has been particularly vibrant. This surge in employment is a response to rising sales and increased business activity, prompting firms to expand staffing capacities,' said Al-Ghaith. The report added that business activity at Saudi Arabia's non-oil companies increased sharply at the start of the second quarter, with firms commonly reporting an expansion in output due to higher sales, new project approvals, and strong tourist numbers. 'While output growth remains robust, it is somewhat tempered by global economic uncertainties and competitive pressures affecting client spending. Nonetheless, employment figures continue to climb, indicating a sustained growth trend since last May,' added Al-Ghaith. He further noted that Saudi Arabia had successfully managed inflation compared to other nations, highlighting the Kingdom's effective control of domestic prices amid global uncertainties. The latest PMI data also signalled a steep increase in purchasing activity, with the growth rate reaching a three-month high. S&P Global noted that expectations among non-oil firms for output in one year's time increased slightly from March, although overall business optimism remained below the long-run survey average. Looking ahead, Al-Ghaith said the Kingdom's fiscal prospects remain positive for 2025. 'Forecasts suggest a 3 percent expansion in overall gross domestic product and a 4.5 percent increase in non-oil sectors, continuing the upward trajectory in non-oil activities,' said Al-Ghaith. He added: 'This growth is crucial for sustaining the economic transformation outlined in Vision 2030, which aims to foster diverse, innovative industries.'
Arab News
07-04-2025
- Business
- Arab News
Saudi non-oil growth holds firm in March with PMI at 58: S&P Global
RIYADH: Saudi Arabia's non-oil private sector maintained its resilience in March, with the Kingdom's Purchasing Managers' Index reaching 58.1, the highest among its Middle Eastern peers. According to the latest Riyad Bank Saudi Arabia PMI report compiled by S&P Global, non-oil private firms in the Kingdom witnessed a marked increase in new order volumes, although the growth rate softened further from the near 14-year record seen in January. The March figure represented a slight decline from the 58.4 seen in February, but it was still higher than UAE's PMI rating of 54, Kuwait's at 52.3 and Qatar's at 52. Any PMI reading above 50 signifies an expansion, while a reading below 50 indicates a contraction. The sustained momentum reflects the Kingdom's Vision 2030 strategy to reduce reliance on oil by accelerating growth in tourism, manufacturing, logistics, and financial services. Naif Al-Ghaith, chief economist at Riyad Bank, described the Saudi non-oil private sector as demonstrating 'significant resilience and growth,' adding: 'This reading reflects sustained positive momentum in business conditions, highlighting the sector's robust economic health and its vital role in the ongoing diversification efforts of the Kingdom as envisaged by Vision 2030.' Saudi Arabia's non-oil businesses continued to increase their employment at an elevated pace in March, driven by an upturn in demand. The report further said that staffing growth was little changed from February's 16-month high, as firms widely commented on efforts to build their sales teams and overall capacity. Survey data also indicated that job growth in Saudi Arabia's non-oil private sector during the first three months of this year was the fastest since the third quarter of 2012. 'Rising employment rates are a direct benefit of businesses scaling up operations to meet demand. By providing more job opportunities, Saudi Arabia aims to nurture a skilled and ambitious workforce, reducing the unemployment rate to 7 percent for Saudi nationals,' said Al-Ghaith. Speaking at the World Investment Conference in Riyadh last November, Saudi Arabia's Minister of Economy and Planning Faisal Al-Ibrahim said non-oil activities now account for 52 percent of the Kingdom's gross domestic product. He added that the non-oil economy has grown by 20 percent since the launch of Vision 2030. The latest PMI report added that greater marketing efforts, lower selling prices, and a broader improvement in economic conditions played a crucial role in driving sales growth among non-oil firms in Saudi Arabia in March. New orders from foreign markets also rose in March, although the rate of expansion slowed. Highlighting the affinity of Saudi Arabia's non-oil products in international markets, a report by the General Authority for Statistics revealed that the Kingdom's non-energy exports surged by 10.7 percent in January to reach SR26.48 billion ($7.06 billion). According to the latest S&P Global report, increased workforces and stronger new businesses supported a robust upturn in non-oil private sector activity during March. Non-oil firms in the Kingdom also engaged in additional stockpiling as they anticipate a sustained uplift in sales. Companies that took part in the survey revealed that purchasing activity rose sharply in March, leading to another steep increase in total inventories. 'The improvement in business conditions supports efforts to attract investment, increase the competitiveness of the Saudi economy, and enhance local business growth,' said Al-Ghaith. He added: 'This initiative is further supported by governmental enhancements in regulatory frameworks and infrastructure investments which pave the way for greater private and foreign investments.' Attracting international investments is one of the crucial goals outlined in Saudi Arabia's Vision 2030, with the Kingdom aiming to attract $100 billion a year in foreign direct investment by the end of this decade. The latest S&P Global report further said that suppliers' delivery times improved in March, with several panellists noting that strong vendor relationships had facilitated efficiency gains. However, some reports of supply disruption and administrative delays led to a much softer overall upturn in performance compared to February. This softening also hindered efforts to clear outstanding work, contributing to a renewed and sharp rise in total backlogs. In terms of pricing, the latest survey revealed that input cost pressures witnessed a marked easing in March. The report added that the rate of inflation dropped to its lowest level in just over four years, as firms saw a much weaker increase in purchase prices. Consequently, non-oil companies reduced their selling prices for the first time in six months. 'Sustaining and nurturing these positive trends, Saudi Arabia is laying the groundwork for a multifaceted and thriving economy that meets the aspirations of its people and the strategic goals of the nation,' said Al-Ghaith. 'With each uptick in the PMI and every incremental GDP growth, the Kingdom moves closer to realizing its ambitions of a diversified, sustainable economic future,' he concluded.
Al Arabiya
07-04-2025
- Business
- Al Arabiya
Saudi Arabia's non-oil private sector shows rapid growth in March: Survey
Saudi Arabia's non-oil private sector activity grew rapidly in March with new orders boosted by lower prices and improved economic conditions, although the rate of growth slowed from January's near 14-year high, a survey showed on Monday. The seasonally adjusted Riyad Bank Saudi Arabia Purchasing Managers' Index (PMI) edged down to 58.1 in March from 58.4 in February but remained far above the 50 mark signaling growth. The new orders subindex slipped to 63.2 in March from February's blistering 65.4 reading. Despite the slower momentum, businesses engaged in stockpiling, anticipating sustained sales growth. Employment growth was driven by increased sales volumes and efforts to boost capacity. The survey data pointed to the best quarter for job creation in over 12 years. Naif Al-Ghaith, Riyad Bank's chief economist said that improved business conditions are supported by government efforts to enhance regulatory frameworks and infrastructure investments, paving the way for greater private and foreign investments. Saudi Arabia's Vision 2030 plan to diversify its economy away from hydrocarbons aims to increase the non-oil sector's contribution to GDP to 65 percent by 2030. It is currently over 50 percent. Input cost inflation eased to a four-year low in March, prompting companies to reduce selling prices for the first time in six months amid strong market competition. Backlogs of work increased sharply, the fastest since August 2018, due to higher orders and constrained capacity. The survey showed a marked softening of business activity expectations for the year ahead across the non-oil economy, however.
Zawya
04-03-2025
- Business
- Zawya
Saudi Arabia's non-oil private sector growth remains robust in February, PMI shows
DUBAI - Saudi Arabia's non-oil private sector continued its robust expansion in February, driven by strong customer sales and increased activity levels, a survey showed on Tuesday, although the pace of growth slowed from the previous month. The seasonally adjusted Riyad Bank Saudi Arabia Purchasing Managers' Index (PMI) fell to 58.4 in February from a decade-high reading of 60.5 in January but remained well above the 50 mark, signalling strong growth. The slight dip in the headline PMI was attributed to a cooling in new business growth, which had surged at the start of the year. The new orders subindex slipped to 65.4 in February, from a reading of 71.1 in January. New sales growth was supported by increased tourism and marketing efforts. The expansion in output, although slightly eased, remained among the sharpest since mid-2023. Naif Al-Ghaith, Chief Economist at Riyad Bank said despite the deceleration in new order growth in February, businesses remained confident about future demand. "This was reflected in higher staffing levels, as companies expanded their workforce to meet increased workloads and business expectations," he said. Employment levels rose at the fastest pace in 16 months, as firms prepared for growth opportunities, with the manufacturing and services sectors seeing the strongest employment growth. Input costs continued to rise, driven by higher material prices and wages, but the pace of inflation eased slightly and firms reported only a modest rise in selling prices due to competitive pressures. Business confidence reached a 15-month high, with firms optimistic about economic growth and supportive government initiatives.
