Saudi Arabia topped the G20 countries in the performance of the purchasing managers’ index (PMI) for the non-oil private sector, in January 2023.
The index recorded headline growth at 58.2 points, marking consecutive growth since September 2020 and reflecting the strength and durability of the Kingdom’s economy despite the state of instability in the global markets.
The results of the index showed an improvement in the level of commercial activity, and an increase in demand for goods and services within the non-oil private sector, amid expectations within the sector that strong growth would continue despite geopolitical developments, climate change and increasing global uncertainties.
The rise in the index came in parallel with strong private sector’s output, which had kept pace with solid domestic demand for goods and services, driven by improvements in the most key sub-indices: Output, New Orders, New Export Orders, Stocks of Purchases, and Increased Client Orders.
The rise in the Kingdom’s PMI reflects the confidence and optimism among investors and business owners. Companies began to provide more positive and optimistic outlook for the market.
The most remarkable points recorded in the index is the decline in cost pressures, which reflects the success of policies to contain the global inflationary wave in many sectors of the Kingdom, in addition to the improvement of supply chains due to the recent policies aimed at diversifying the economy and enhancing its flexibility.
The economic reforms launched within Saudi Arabia’s Vision 2030 have contributed to empowering the private sector, by raising the quality, efficiency and digitization of government services provided to businesses, in addition to the establishment of many programs and initiatives, financing funds, business incubators and accelerators.
The private sector has benefitted from government support provided through the Shareek program, where 28 companies have received SAR 192 billion of investment. The number of foreign investment licenses also increased in 2022, as a result of efforts to promote FDI and allowing violators of the anti-concealment law to correct their status.
