Saudi non-oil PMI holds strong at 58.5 as output growth hits 10-month high

04/12/2025 03:59 AST

Saudi Arabia's non-oil economy maintained strong momentum in November, with output rising at its fastest pace in 10 months even as the headline Purchasing Managers' Index eased to 58.5.

The latest Riyad Bank and S&P Global survey showed the PMI slipping from October's 60.2 - its second-highest level in more than a decade. Despite the slight dip, the index continued to signal a robust improvement in the health of the non-oil private sector economy.

Any PMI reading above 50 indicates expansion, while a reading below 50 reflects contraction.

The sustained momentum underscores the Kingdom's Vision 2030 strategy to reduce reliance on oil by accelerating growth in tourism, manufacturing, logistics and financial services.

Naif Al-Ghaith, chief economist at Riyad Bank, said: "The non-oil private sector remained firmly in expansion territory in November, although momentum eased slightly after October's sharp uptick."

He added: "The headline Riyad Bank Saudi Arabia PMI registered 58.5, indicating another strong improvement in business conditions, supported by broad gains across output, staffing and purchasing activity."

According to S&P Global, operating expenses among non-oil firms increased at the softest rate since March, with companies noting reduced pressure on their purchasing costs.

Businesses that took part in the survey reported that strong demand conditions and new orders contributed to the strengthening of output and expansion efforts.

Overall, 30 percent of surveyed firms increased their output compared to the previous month, while only 1 percent reported a contraction.

"Activity levels continued to rise, driven by steady demand and ongoing projects. New orders extended a growth streak of over five years, though the pace moderated slightly from October's surge," said Al-Ghaith.

He noted that export orders also increased for the fourth consecutive month in November, albeit more moderately, as global markets faced softer conditions and increased competition.

Supported by improving order books and strong growth indicators, non-oil companies in Saudi Arabia recorded higher purchasing activity, staffing levels and inventories in November. However, all three growth rates slowed from October.

"Employment growth eased from last month's rise but still signalled solid hiring across most sub-sectors. Firms continued to expand capacity to accommodate higher workloads, while purchasing activity remained positive," said Al-Ghaith.

He added: "Inventory growth was more controlled as businesses balanced input needs with efficient stock usage. As firms managed their workflows more efficiently, input cost inflation softened, reflecting slower increases in purchase prices."

Surveyed firms indicated that higher purchasing requirements led to increased buying activity and stock accumulation.

Regarding the future outlook, non-oil firms expressed optimism driven by healthy demand pipelines and a favorable business environment.

"Looking ahead, confidence is being supported by anticipated improvements in demand, active pipelines of new projects and ongoing investment activity. While growth has eased from October's highs, November's readings show that growth remains steady, driven by stable demand patterns and continued progress on active projects," concluded Al-Ghaith.

Arab News