S. Arabia’s non-oil private sector growth accelerates in Sept – PMI

Saudi Arabia’s non-oil private sector reported accelerated growth in September, with the Riyad Bank Saudi Arabia PMI rising to 56.3, its highest level in four months.

The uptick was driven by increased business activity and a surge in new orders, following slower growth earlier in the third quarter. This marked the second consecutive rise in the PMI, up from 54.8 in August.

Employment levels also improved, though firms faced challenges finding skilled staff, leading to some capacity shortfalls. Despite these challenges, the private sector’s performance remained strong, buoyed by higher domestic demand and new projects. However, concerns over increased competition resulted in a softening of future output expectations and a continued reduction in selling prices for the third month in a row.

Naif Al-Ghaith, Chief Economist at Riyad Bank, noted that this growth highlights the resilience of Saudi Arabia’s non-oil sector amid declining global oil prices and production cuts. He emphasised that the diversification away from oil revenues is crucial for economic stability and long-term growth.

While input stocks remained healthy, businesses eased their procurement efforts, with purchasing growth dropping to its lowest in three years. The survey also noted improvements in delivery times, though at a slower pace compared to previous months.

“This growth in the non-oil sector is particularly significant given the current context of oil production cuts and declining global oil prices.” Al-Ghaith said.

Attribution: Riyad Bank Saudi Arabia PMI – September

Subediting: Y.Yasser