S. Arabian non-oil private sector improves in August – PMI

Saudi Arabia’s non-oil private sector saw improved business conditions in August, with the Riyad Bank Saudi Arabia PMI climbing from 54.4 in July to 54.8. This increase, though modest, marks the first strengthening of growth since February and indicates a robust pace of activity.

Employment surged to one of the highest rates in a decade as companies enhanced their operational capacity. New order growth picked up slightly, and purchasing activity and stock levels increased due to stronger business expectations. However, overall growth momentum remained slower compared to recent trends, with non-oil sector output rising at one of the weakest rates since early 2022.

Firms reduced selling prices for the second consecutive month to stimulate demand amid a competitive market. Margins were squeezed less than in July due to a smaller rise in purchase costs.

Naif Al-Ghaith, PhD, Chief Economist at Riyad Bank, noted, “The PMI reading of 54.8 in August underscores steady business expansion despite competitive conditions. Employment growth and increased new orders reflect confidence in meeting market demands.”

Export orders grew more slowly, showing Saudi companies’ efforts to find opportunities abroad. The report highlights the impact of the Kingdom’s Vision 2030 initiative, with optimism about future activity and expectations for output rising to their highest since March. Companies are investing in capacity expansion, leading to a sharp rise in hiring and a swift decline in backlogs of work.

Attribution: Riyad Bank Saudi Arabia PMI

Subediting: Y.Yasser