Saudi Arabia’s Non-Oil Sector Shows Steady Growth in March
The latest data on Saudi Arabia’s non-oil private sector reveals a steady growth in March, with output reaching a six-month high, as indicated by the Kingdom’s Purchasing Managers’ Index.
The economic index stood at 57 in March, slightly down from 57.2 in February, according to a report by the Riyad Bank Saudi Arabia PMI by S&P Global.
Any PMI reading above 50 signifies growth in the non-oil sector, while readings below that indicate contraction.
Surpassing Other Gulf Cooperation Council Countries
Saudi Arabia’s PMI in March outperformed other Gulf Cooperation Council countries like the UAE, Egypt, and Kuwait, signaling that the Kingdom’s non-oil sector growth aligns with the objectives set in Vision 2030.
Strengthening the non-oil sector is crucial for Saudi Arabia as the country continues to diversify its economy away from oil.
Robust Improvement in Operating Conditions
The US-based firm reported that operating conditions in Saudi Arabia’s non-oil private sector showed a robust improvement at the end of the first quarter, with companies witnessing significant increases in order books and new customers.
Naif Al-Ghaith, chief economist at Riyad Bank, highlighted the notable upswing in Saudi Arabia’s PMI, driven by a surge in demand across various sectors, indicating a strong economic performance.
He emphasized the substantial uptick in business activity, accelerated purchasing activities, and additional hiring, underlining a positive market outlook.
Optimism for Future Growth
The report also revealed rising optimism among businesses in the non-oil sector for the next 12 months, fueled by expectations of increased demand.
The surge in orders and customer acquisition not only boosted current operations but also laid the groundwork for continued expansion and potential business growth in the future, according to Al-Ghaith.
UAE Maintains Growth Momentum
The UAE’s non-oil private sector witnessed strong growth in March, with the Purchasing Managers’ Index reaching 56.9, slightly lower than February’s 57.1 but still indicating expansion in activity.
David Owen, a senior economist at S&P Global Market Intelligence, highlighted the robust upturn in business conditions in the UAE non-oil private sector, with order book inflows and activity levels continuing to grow sharply.
Kuwait Records Spike in New Orders
In contrast, Kuwait experienced a significant rise in new orders in March, leading to a PMI of 53.2, up from 52.7 in February, with output and new orders expanding at a quicker rate.
Andrew Harker, economic director at S&P Global Market Intelligence, noted that non-oil firms in Kuwait are currently in a phase of strong growth, supported by competitive pricing strategies attracting more customers.
Qatar Economy Shows Sustained Improvement
Qatar’s non-energy private sector economy witnessed a marginal decline in its PMI to 50.6 in March, reflecting sustained growth in output, new orders, and employment, according to Yousuf Mohamed Al-Jaida, CEO of Qatar Financial Center Authority.
Egypt Sees Decline in Business Activity
On the other hand, Egypt’s non-oil private sector continued to deteriorate in March, with a PMI of 47.6. Weak order books and inflationary pressures impacted business output and confidence, with concerns about economic headwinds lingering.