Prime Highlight:
- Saudi Arabia’s non-oil private sector continued to expand in December 2025, supported by strong demand, business activity, and hiring.
- Economists said the performance reflects progress under Vision 2030, aimed at boosting private sector growth and reducing reliance on oil revenues.
Key Facts:
- The PMI for the non-oil sectorstood at 4 in December, above the neutral 50 mark, signaling ongoing expansion despite easing from November’s 58.5.
- Employment levels rose, new orders increased, and purchasing activity hit a three-month high, though export demand growth remained modest.
Background:
Saudi Arabia’s non-oil private sector closed 2025 on a positive note, supported by steady growth in business activity, strong demand, and continued hiring, a key economic survey showed.
The Purchasing Managers’ Index (PMI) for the Kingdom’s non-oil sector stood at 57.4 in December, according to data from Riyad Bank and S&P Global. Although the reading eased from 58.5 in November, it remained well above the neutral 50 mark, signalling ongoing expansion across the economy.
Economists said the strong performance highlights progress under Saudi Arabia’s Vision 2030 programme, which aims to reduce the country’s reliance on oil revenues by strengthening private sector growth.
Riyad Bank’s chief economist Naif Al-Ghaith said the sector continued to expand despite a slight loss of momentum. He noted that output growth stayed solid, supported by healthy domestic demand, new project approvals, and sustained business investment, even as the pace of growth slowed to its weakest level since August.
Non-oil firms reported higher activity in December due to rising new business, ongoing work on existing projects, and increased spending. New orders rose sharply during the month, although the rate of growth was the softest since August. Companies linked the rise in demand to improved economic conditions, new clients, fresh contracts and effective marketing efforts.
Export demand increased marginally for the fifth month in a row, but the latest rise was the weakest in that period, pointing to uneven external demand.
Employment levels continued to rise, broadly matching November’s pace, though hiring slowed from October’s peak. Even though companies hired more workers, backlogs kept growing and reached their highest level since July.
Purchasing activity also strengthened, hitting a three-month high and leading to higher input stocks, helped by faster supplier delivery times.
Looking ahead, business confidence softened. While firms still expect growth in 2026, rising competition has made outlooks more cautious.
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