Saudi Arabia’s Private Sector Non-Oil Growth Holds Steady in May
The latest data shows that Saudi Arabia’s private sector non-oil growth remained steady in May, with the Purchasing Managers’ Index reaching 56.4, a slight decline from April’s 57. According to the Riyad Bank Saudi Arabia PMI report by S&P Global, business activity in the Kingdom rose at a substantial rate in May, continuing a period of robust output growth across the non-oil economy.
Positive Trend in Non-Oil Economy Driven by Increased Demand
Chief economist Naif Al-Ghaith noted that the PMI for Saudi Arabia’s non-oil economy shows a positive trend, driven by increasing demand as evidenced by the rise in new orders. However, this surge in demand has also led to price pressures impacting input prices and staff costs, reflecting the challenges faced by businesses in managing costs while trying to capitalize on the expanding market.
Strong Demand Conditions and Strategic Responses
The report highlighted that business activity and new order growth in Saudi Arabia remained steep in May, with robust inventory growth continuing as companies prepared for strong sales performances in the future. Al-Ghaith emphasized that the rise in inventory levels and prices has prompted firms to adjust their purchasing behaviors strategically in response to changing market dynamics.
Diversification Efforts Driving Non-Oil GDP Growth
Al-Ghaith pointed out that Saudi Arabia’s efforts to diversify the economy will strengthen the growth of the non-oil gross domestic product. The forecast suggests a continuation of the upward trajectory, with non-oil GDP growth expected to exceed 3% driven by ongoing efforts to diversify the economy in line with Vision 2030.