Saudi Non-Oil Private Sector Growth Eases in February

Riyad Bank Saudi Arabia’s PMI edged down to 56.1 in February 2026 from 56.3 in January, signaling the softest improvement in non-oil business conditions in nine months. Output growth remained robust but lost pace, hitting a six-month low as competitive pressures and moderating international orders weighed on expansion. Meanwhile, the labour market showed notable strength. Staff numbers rose sharply, fueling a survey-record increase in wages as firms competed to retain and attract talent. Selling prices also accelerated, recording the joint-fastest uplift since May 2023. Sub-indices for domestic sales and new orders continued to rise strongly, supported by elevated customer demand, digital initiatives, and collaborative client projects. Order books expanded broadly, highlighting sustained domestic activity. Looking ahead, business confidence remained positive, with firms citing new client projects, stronger demand, and improving domestic economic conditions.

Riyad Bank Saudi Arabia’s PMI eased to 56.3 in January 2026 from 57.4 in December, the lowest in six months and slightly below its long-term average. Still, the reading is consistent with a robust expansion, suggesting growth momentum has cooled but operating conditions remain firmly in positive territory. Business activity continued to rise at a solid pace and new orders increased at a marked rate, reflecting resilient domestic conditions. Export demand also strengthened, as new export orders expanded at the fastest pace since October 2025. Employment growth remained strong, though the pace of hiring eased to the softest in a year after peaking last October. Cost pressures intensified for a second straight month, with higher input prices, purchase costs, and staff expenses, particularly for metals, materials, fuel, and technology. Business confidence improved from December but stayed below its long-term average, pointing to cautious optimism for 2026.

Riyad Bank Saudi Arabia’s PMI fell to 57.4 in December 2025 from 58.5 in November, signaling a cooling but still solid expansion in non-oil private sector activity as 2025 concluded. While marking the slowest growth in four months, the headline index remained slightly stronger than its long-run average, as business activity continued to rise, though it softened to its weakest since August. New orders increased sharply again but growth also moderated amid concerns over rising competition and market saturation. Employment growth remained robust, with firms continuing to expand capacity, even as backlogs accumulated at the fastest since July. On prices, inflationary pressures intensified as purchase prices rose more quickly, prompting firms to lift selling prices at a stronger pace, while wage pressures eased to their lowest in nearly two years. Business confidence weakened to its lowest since July, reflecting a more cautious outlook for 2026 despite expectations of continued growth.