Saudi Arabia's non-oil private sector recorded significant acceleration in September 2026, as the Riyad Bank Purchasing Managers’ Index (PMI), seasonally and economically adjusted and compiled by S&P Global, rose to 55.3 percent, up from 53.8 percent in August. This increase reflects the highest level for business conditions since February, surpassing the 50 percent neutral mark that separates growth from contraction.
Record Rise in New Orders
Report data showed that the sector's growth was primarily supported by a sharp rebound in new orders, which recorded their fastest rate of increase since last February, amid improving market conditions, increased domestic spending, and customer demand.
In response to this influx of orders, companies bolstered their operational and investment capacities, driving employment activity to accelerate to its highest level in seven months. Recruitment efforts specifically targeted supporting technical staff and expanding sales teams. Purchasing activity also saw robust growth, with purchases of production inputs recording their highest increase in seven months.
Decline in Foreign Sales
Despite the domestic rebound, the report indicated continued weakness in foreign demand, with new orders from international clients declining for the seventh consecutive month due to supply chain disruptions and regional geopolitical tensions.
Supply chain data also showed only a slight improvement in supplier delivery times, and at the slowest pace in five months. These delays and rising costs contributed to a slowdown in production growth to its lowest level in five months, coupled with an increase in backlogs for the first time since May.
Cost Pressures and Rising Selling Prices
Companies reported a continued sharp increase in input prices due to elevated material and transportation costs. To protect profit margins, establishments raised selling prices to customers at a high rate, marking the second fastest increase in over six years.
Regarding the outlook, the Future Output Index showed a decline in business optimism for the coming year to its lowest level since March, amid the prevailing uncertainty caused by regional disruptions and supply chains.
Commenting on these results, Dr. Naif Alghaith, Chief Economist at Riyad Bank, affirmed that September's results are consistent with the overall picture of the Saudi economy; where domestic consumption, investment activity, government projects, in addition to Public Investment Fund projects, and credit availability, continue to provide fundamental support for non-oil activity.
Alghaith added: “The increase in unfinished work, coinciding with the acceleration in employment and purchasing to a seven-month high, indicates that companies are building their operational capacities to meet sustained demand and expand their production capabilities, rather than merely offering temporary responses.”
