Growth in Saudi Arabia's non-oil sector and the Purchasing Managers' Index
The latest economic data showed continued positive momentum in Saudi Arabia’s non-oil private sector , with companies reporting a sharp rise in output levels, driven by an increased flow of new business, an acceleration in the pace of ongoing projects, and a notable increase in investment spending.
Purchasing Managers' Index (PMI) performance
Riyad Bank Purchasing Managers’ Index (PMI) revealed that the non-oil private sector remained firmly in growth territory during December. Although the index dipped slightly to 57.4 points from 58.5 in November, the reading still indicates robust expansion in business activity, as any figure above 50.0 points is considered an indicator of growth.
These figures gain particular importance when compared to the historical long-term average of the index of 56.9 points, which confirms the strength of the Saudi economy and its ability to maintain performance levels that exceed historical averages despite global economic challenges.
The context of Vision 2030 and economic diversification
This continued growth comes within the context of major structural transformations driven by the Saudi economy under Vision 2030 , which primarily aims to reduce dependence on oil revenues and diversify income sources. Growth in the non-oil sector is the most important indicator of the success of this strategy, with the increase in ongoing projects and investment spending reflecting tangible activity in the infrastructure, tourism, and logistics sectors.
Growth drivers and demand challenges
In more detail, the sub-index for new orders fell to 61.8 in December from 64.6 in November, marking the slowest pace of expansion in four months. However, companies indicated that improved overall economic conditions and successful marketing campaigns were key factors in maintaining sales momentum.
This performance reflects the resilience of the Saudi private sector in the face of market fluctuations, and indicates that government policies supporting investment and stimulating the private sector are paying off, which enhances positive expectations for the performance of the local economy in the coming period, especially with the continued injection of investments into mega-projects.
