Saudi Arabia’s non-oil private sector posted a notable positive shift in April 2026, regaining growth momentum despite escalating geopolitical pressures and disruptions to international shipping routes — described as the “winds of Hormuz” — that affected supply chains and market expectations.
The Riyad Bank Purchasing Managers’ Index (PMI) rose to 51.5 points, surpassing the neutral 50-point mark. The recovery reflected companies’ ability to increase output levels in response to an influx of new business and progress on existing projects, despite continuing geopolitical challenges in the region and ongoing global supply chain disruptions that continued to weigh on customer spending decisions.
In this context, Riyad Bank Chief Economist Naif Alghaith said the results confirmed that the non-oil sector remained on a constructive and resilient trajectory, supporting the strategic goals of economic diversification under Saudi Vision 2030.
He added that the return of the index to expansion territory demonstrated that underlying business conditions remained fundamentally strong, with domestic demand and purchasing power offsetting the noticeable weakness in export orders. This, he noted, highlighted the growing importance of the Kingdom’s domestic economic engine in reducing reliance on external cycles.
Operationally, April saw a rapid and unprecedented increase in cost burdens, with input prices rising at the fastest pace since the survey began in August 2009. Sharp increases in raw material prices, shipping costs and logistics expenses resulting from regional disruptions pushed companies to implement near-record increases in selling prices in an effort to pass costs on to customers.
Alghaith said supply chain dynamics remained a key area of focus, particularly as delivery times continued to lengthen, prompting companies to adopt proactive behavior by increasing inventories as a precautionary measure to ensure business continuity.
Although the pace of overall business expansion remained slow by historical standards due to investor and customer caution surrounding the conflict in the Middle East, future expectations remained optimistic. The survey showed an improvement in business confidence regarding activity over the next 12 months, driven by long-term expansion prospects and major domestic infrastructure projects.
Alghaith said the Kingdom’s stable and robust economic fundamentals positioned it strongly to sustain long-term growth and stability, adding that optimism and strong domestic demand continued to reinforce confidence in Saudi Arabia’s economic transformation path.
For his part, Osama bin Ghanem Al-Obaidy, adviser and professor of commercial law, told Asharq Al-Awsat that the rise in the Purchasing Managers’ Index reflected the ability of Saudi companies to deal with the Strait of Hormuz crisis and its repercussions on the economy and global supply chains.
He said the improvement was driven by increased domestic demand, national economic diversification programs, Vision 2030 projects and infrastructure development, as well as stronger purchasing activity, reflecting the growing positive momentum of the Kingdom’s non-oil economic activities.
Al-Obaidy added that the improvement came despite mounting cost pressures resulting from higher raw material prices, transportation costs and rising wages.
