Saudi Non-Oil Private Sector Growth Continues in May

Riyad Bank Saudi Arabia's PMI rose to 52.8 in May 2026 from 51.5 in April, signaling a stronger improvement in non-oil private sector conditions. Output expanded at the fastest pace in three months, supported by stronger domestic demand, resumed projects, and normalized operations following earlier disruptions. However, new order growth remained modest, while export orders contracted sharply for a third consecutive month amid shipping disruptions, higher freight and fuel costs, and geopolitical tensions. Supply chain conditions improved, with delivery times shortening for the first time since February, while purchasing activity returned to growth. Employment also expanded modestly as firms worked through rising backlogs. Meanwhile, cost pressures remained elevated despite easing from April’s record high, prompting another sharp increase in selling prices. Business confidence remained subdued amid ongoing regional uncertainty.

Riyad Bank Saudi Arabia’s PMI rose to 51.5 in April 2026 from March's sharp contraction at 48.8, signaling a modest recovery in the non-oil private sector after disruptions due to the Middle East war. The rebound was driven by improved domestic demand and a pickup in new business, but growth remained subdued as Middle East conflict-related uncertainty continued to delay spending and investment decisions. Export orders fell at the fastest pace on record, and output expanded but at a historically muted pace, while purchasing activity declined for a second month amid cautious input buying. Inventories increased as firms sought to buffer against supply disruptions, with delivery times lengthening due to shipping delays. Cost pressures intensified sharply, with input prices rising at the fastest rate in the survey’s history, pushing selling prices near record highs. Still, business sentiment improved, supported by strong domestic fundamentals and ongoing government-led development.

Riyad Bank Saudi Arabia’s PMI plunged to 48.8 in March 2026 from 56.1 in the prior month, signaling the first drop in the non-oil private sector in near six years and the steepest downturn since a record low in March 2020. The decline stemmed from Middle East war disruptions that strained supply chains and delayed client spending. New orders stalled, export demand shrank the most in six years, and output growth eased. Buying levels slowed, though inventories rose, reflecting limited stockpile reduction. Employment rose but at a weaker pace, while delivery times lengthened the most since June 2020 amid shipping delays and higher fuel costs. Supply constraints lifted backlogs to their highest since July 2018. On inflation, input cost rose the least in a year on softer wage pressures, though fuel and freight costs raised purchasing and selling prices. Sentiment dipped to its lowest since June 2020, as war concerns overshadowed support from government spending.