Saudi Arabia’s non-oil private sector expanded for the third consecutive month in October, driven by a surge in new orders - their highest levels since March - and a substantial rise in sales, which significantly boosted business activity.
The Riyad Bank Purchasing Managers’ Index (PMI) increased from 56.3 in September to 56.9 in October, reflecting improved operating conditions and economic momentum. This growth was attributed to robust sales in October, as companies reported strong customer demand and overall favorable economic conditions.
Consequently, businesses experienced an expansion in commercial activity and maintained a positive outlook for future growth. Additionally, purchasing of production inputs accelerated after reaching a three-year low in September, though it remained moderate compared to early-year levels, with companies noting sufficient inventory levels.
The report highlighted, however, that the strong sector-wide improvement was accompanied by increased cost pressures in materials and staffing, resulting in the first rise in average prices for goods and services in four months.
Dr. Naif Al-Ghaith, Chief Economist at Riyad Bank, told Asharq Al-Awsat that the robust economic performance was driven by a notable rise in sales, contributing to expansions in employment, procurement, and inventory.
The accelerated pace of input purchases in September, the fastest in three years, reflects a continued expansionary trend since September 2020, driven by rising demand, he stressed
The significant increase in new orders in October underscores the success of Vision 2030’s strategic emphasis on innovation and infrastructure development, he added.
More than 40% of surveyed companies reported increased demand, driven by strong local customer interest, creative marketing strategies, and sustained investments in infrastructure, demonstrating the resilience of Saudi Arabia’s economy and reinforcing its position as a leading non-oil economy in the region.
He noted that these gains align with the non-oil GDP growth rate of 4.2% in the third quarter, indicating a positive economic shift as the country seeks to diversify income sources away from oil, contributing to Vision 2030’s goals of building a sustainable economy capable of meeting future challenges.
Al-Ghaith projected that the non-oil sector’s contribution to GDP would exceed 52%, with growth surpassing 4% this year.
