Saudi Arabia’s non-oil private sector PMI at 55, leading the Gulf region – S&P Global

RIYADH: Saudi Arabia’s non-oil private sector showcased robust growth in June, driven by increased demand, higher output levels, and a rise in employment, according to a report.

The latest S&P Global Purchasing Managers’ Index showed that the Riyad Bank Saudi Arabia PMI stabilized at 55 from 56.4 in May, marking the lowest reading since January 2022. 

Despite the slowdown in new orders, which saw the slowest growth in nearly two and a half years, non-oil businesses reported a substantial rise in output, helping the Kingdom led the region with the strongest expansion figures.

Companies boosted their production levels to support ongoing sales and projects, reflecting a positive business environment.

Naif Al-Ghaith, chief economist at Riyad Bank, said: “The PMI for the non-oil economy recorded at 55.0 in June, marking the slowest pace of expansion since January 2022. The new orders component fell compared to the previous month, suggesting a slight moderation in demand growth.”

He added: “However, the growth in non-oil sectors was supported by a strong increase in output levels. Employment numbers also rose, while suppliers’ delivery times continued to improve.”

The second quarter growth figures indicate a positive outlook for Saudi Arabia’s non-oil gross domestic product, with expected gains exceeding 3 percent.

High output levels, stable supply chains, and moderate job creation point toward a resilient and expanding non-oil economy, contributing to the country’s economic diversification efforts.

Saudi Arabia is actively diversifying its economy under Vision 2030, attracting global investments in technology and tourism through initiatives like NEOM. 

The Kingdom has also opened up its tourism sector with projects such as the Red Sea and Al-Ula, while cultural events and industrial programs like the National Industrial Development and Logistics Program stimulate economic growth. 

Concurrent financial reforms and investments in renewable energy reduce oil dependence. These efforts are complemented by measures to support SMEs and enhance education, preparing the workforce for new economic sectors and underscoring Saudi Arabia’s commitment to transformation.