Prime Highlights
- Saudi Arabia’s non-oil private sector continued expanding in January, supported by higher output, rising client activity, and improved market conditions, according to the Riyad Bank PMI.
- The growth reflects ongoing progress under Vision 2030, with manufacturing, services, and exports driving economic diversification beyond oil.
Key Facts
- The Riyad Bank PMI for January stood at 56.3, above the 50-point threshold, signaling continued expansion despite a slight slowdown from December’s 57.4.
- Real GDP in 2025 grew 4.5%, with non-oil activities expanding 4.9%, supported by increased new orders, staffing, and input purchases across sectors.
Background
Saudi Arabia’s non-oil business sector continued to grow at a strong pace in January, supported by higher output, improving market conditions, and rising client activity, according to the latest Purchasing Managers’ Index data.
S&P Global reported that the Riyad Bank PMI was 56.3 in January, slightly down from 57.4 in December. Despite the small decline, the reading remained well above the 50 mark, which separates growth from contraction.
The data shows that Saudi Arabia is making ongoing progress under its Vision 2030 plan, which aims to reduce reliance on oil by growing sectors like tourism, manufacturing, logistics and financial services.
Naif Al-Ghaith, chief economist at Riyad Bank, said the non-oil private sector entered 2026 on a strong footing. He noted that steady domestic demand and sustained business activity continued to support growth, even though the pace eased slightly compared to the previous month.
According to the PMI report, business conditions improved as market demand increased and firms raised employment and purchasing activity. New orders continued to rise, driven by positive domestic conditions and stronger client engagement. As a result, companies increased staffing levels and input purchases.
Manufacturing and services firms saw the strongest growth, reflecting favorable local economic conditions. Export demand also helped growth, as new export orders rose at the fastest pace since October 2025. Higher demand from Gulf Cooperation Council countries and Asian markets mainly drove this increase.
Around 23 percent of surveyed firms reported higher output in January, while only 2 percent saw a decline. Hiring activity remained strong but showed signs of slowing. After peaking late last year, job creation eased to its weakest level in 12 months, partly due to a focus on hiring skilled and technical workers.
The General Authority for Statistics reported that Saudi Arabia’s real GDP grew by 4.5 percent in 2025. Non-oil activities grew by 4.9 percent. Businesses are optimistic about the future, supported by strong demand and stable economic conditions.
