Saudi Arabia’s non-oil private sector continued its steady growth in December, registering an increase that remained unchanged from November.
This growth was recorded by all sectors included in a special study of the Purchasing Managers’ Index (PMI), as companies mainly linked the expansion of production to an increase in new business flows, which grew at the highest rate since June.
The Riyad Bank Purchasing Managers’ Index in Saudi Arabia recorded 57.5 points in December 2023, for the second month in a row, indicating a noticeable improvement in the conditions of the non-oil economy, as the index remained above the neutral reading of 50 points for more than 3 years.
According to the Purchasing Managers’ Index issued on Wednesday, the improvement in business conditions continued strongly in the Kingdom’s non-oil private sector during the end of 2023.
The private sector also witnessed the fastest rate of sales growth since June. The increase in new purchase orders gave companies greater confidence in setting prices and helped achieve a noticeable growth of purchasing activity. Conversely, expectations for employment growth and commercial activity declined compared to November of the same year.
Furthermore, the pace of sales growth was among the fastest recorded in the last 9 years, with companies highlighting the presence of new customers and improving demand conditions.
Non-oil producing companies continued to indicate optimistic expectations for the next 12 months, anticipating that new business flows would continue to grow strongly. However, the degree of confidence softened and was below the trend recorded in 2023.
Construction companies were the most optimistic about their growth prospects compared to the other major sectors.
“Saudi Arabia’s non-oil PMI for December reached an impressive 57.5 driven by a faster increase in new orders, particularly within the manufacturing sector,” Naif Al-Ghaith, chief economist at Riyad Bank, said in the report.
He added: “This growth was supported by a sharp rise in business activity and exports, highlighting the resilience and strength of the non-oil economy.”
