Saudi Arabia’s Non-Oil Private Sector Growth Accelerates in May, PMI Shows

Riyadh, June 3, 2025 (Saudi Arabia Breaking News) – Growth in Saudi Arabia’s non-oil private sector accelerated in May, driven by a strong rebound in new orders and rising business confidence, according to a survey published on Tuesday.

The seasonally adjusted Riyadh Bank Saudi Arabia Purchasing Managers’ Index (PMI) rose to 55.8 in May, up from 55.6 in April, signaling a solid expansion, though still below the peak of 60.5 recorded earlier this year.

New order volumes rebounded sharply from an eight-month low in April, supported by strong demand, sales performance, and new marketing initiatives. New export orders also expanded, though at the slowest pace in seven months.

The new order subindex rose to 62.5 in May, up from 58.6 in April.

Output growth slowed modestly, reaching its softest pace since September 2024.

According to the survey, the construction sector led gains in both overall activity and new business.

“On the domestic front, firms increased hiring to match output needs, while purchasing activity recorded its fastest growth since March 2024, supported by improved vendor delivery times and a more agile supply chain,” said Naif Al-Ghaith, Chief Economist at Riyadh Bank.

Input prices rose sharply, driven by higher supplier charges for raw materials. However, competitive pressures led firms to lower selling prices, particularly in the services sector, despite the uptick in costs.

Business confidence improved significantly, with optimism reaching an 18-month high as firms cited expansion plans and improving demand conditions.

The latest PMI figures underscore the continued resilience of Saudi Arabia’s non-oil private sector amid the Kingdom’s efforts to diversify the economy and advance the goals of Saudi Vision 2030.