S&P Global: S. Arabia’s non-oil sector expands at fast pace in 16-m

Saudi Arabia’s non-oil private sector expanded at its fastest pace in 16 months in November, with the Riyad Bank Saudi Arabia Purchasing Managers’ Index (PMI) rising to 59.0 from 56.9 in October. This marks the fourth consecutive monthly increase, driven by surging new orders, business activity, and employment growth, according to Riyad Bank and S&P Global.

Business activity rose sharply, supported by robust domestic and foreign demand, increased customer numbers, and successful marketing campaigns. Employment grew at the second-highest rate in over a decade, reflecting firms’ need to support rising workloads.

Input costs increased at the fastest rate in over four years, driven by higher material prices, geopolitical tensions, and transport costs, while wages saw the sharpest rise in a decade. Businesses raised selling prices at the strongest pace since January to offset inflationary pressures.

Inventory expansion and purchasing activity also accelerated, as firms prepared for continued demand growth. However, supply chain pressures emerged, with vendor performance improving at its slowest rate in 15 months.

Naif Al-Ghaith, Riyad Bank’s Chief Economist, said the robust performance underscores the success of Saudi Arabia’s Vision 2030 in diversifying the economy and reducing reliance on oil. He noted the sector’s ability to attract investment, boost consumer confidence, and enhance trade partnerships despite global uncertainties.

Firms remain optimistic about sustained growth, underpinned by steady demand and broader economic diversification efforts.

Attribution: S&P Global

Subediting: M. S. Salama