Prime Highlights:
- Saudi Arabia’s non-oil private sector grew steadily in August, with the PMI rising to 56.4, showing strong economic momentum.
- Business confidence improved after July’s low, backed by rising demand, new projects, and supportive government policies.
Key Facts:
- Saudi Arabia outperformed regional peers, as the UAE and Kuwait posted PMIs of 53.3 and 53.0 in August.
- Companies reported higher orders from both local and export markets, especially in the service sector, reflecting stronger demand.
Key Background:
Saudi Arabia’s non-oil private sector continued to expand in August, supported by rising domestic demand and a revival in export orders, according to the latest survey from Riyadh Bank and S&P Global. Riyad Bank reported that Saudi Arabia’s PMI edged higher in August to 56.4, compared with 56.3 in July, remaining comfortably above the growth level of 50.
Saudi Arabia did better than the UAE and Kuwait, which had PMIs of 53.3 and 53.0 in August. This shows the government is making good progress in diversifying its economy under Vision 2030.
Naif Al-Ghaith, Chief Economist at Riyadh Bank, noted that the slight growth in the PMI indicates steady expansion, justified by increased demand, a slight rise in output, and additional employment. He added that while growth has slowed a little from earlier this year, the overall trend remains positive.
Survey respondents reported stronger sales, proactive marketing initiatives, and increasing orders as key drivers of the August growth. Companies noted a rise in new order volumes, fueled partly by renewed export sales and collaborative efforts with clients across the Gulf Cooperation Council (GCC) region. Businesses saw more new work coming in, helped by local and overseas demand, especially in the service sector, Al-Ghaith said.
The unemployment pattern was also very stable, as firms increased their workforce to cope with increasing project needs and skill sets.
Business confidence improved in August after hitting its lowest point in July. Companies are hopeful that it will grow, citing the presence of projects, increased demand, and the backing of government policy.
On the whole, the August PMI report indicates that the non-oil sector of the Saudi Arabian private sector continues to expand steadily and is diversifying effectively outside of oil.
