Saudi Arabia’s Non – Oil Private Sector Growth Accelerates in May; UAE Slows; Qatar Post Budget Deficit

Saudi Arabia’s non – oil private sector activity accelerated in May, while the UAE posted its slowest pace of growth in nearly four years and Qatar recorded a fire – quarter budget deficit, surveys and government data showed this week.

Riyadh, June 4, 2025 (Saudi Arabia Breaking News) – The seasonally adjusted Riyadh Bank Saudi Arabia Purchasing Managers’ Index (PMI) rose to 55.8 in May in April, remaining firmly in expansionary territory despite being below the January peak of 60.5.

New order volumes in the Kingdom rebounded sharply from an eight-month low, supported by robust demand, strong sales performance, and enhanced marketing initiatives. The new order subindex to 62.5 in May from 58.6 in April. New export orders also rose, albeit at the slowest pace in seven months.

However, the pace of output growth eased to its softest level since September 2024. The construction sector led the gains in both output and new business.

“On the domestic front, firm increased hiring to match rising output needs, while purchasing activity saw its fastest growth since March 2024, supported by improved vendor delivery times and a more agile supply chain”, said Naif Al – Ghaith, Riyadh Bank’s chief economist.

Input prices rose sharply, driven by higher supplier charges for raw materials. Yet competitive pressures led firms to reduce selling prices, particularly in the services sector. Business optimism improved significantly, reaching an 18 – month high, as firms cited expansion plans and improved demand conditions.

Meanwhile, in the United Arab Emirates, growth in the non – oil private sector slowed to its weakest pace in nearly four years in May, according to the S&P Global UAE PMI released on Wednesday.

The index dropped to 53.3 from 54.0 in April, marking the lowest reading since September 2021, though remaining above the 50.0 mark that signals expansion.

The rate of output growth was the weakest in 44 months, while new order growth, although robust, softened to a seven-month low, with the subindex at 56.2, down from 56.9.

“Although businesses continued to welcome strong demand from clients, competitive pressures, and weaker trade amid U.S. tariffs weighed on growth”, said David Owen, senior economist at S&P Global Market Intelligence.

Inventories saw a record decline as firms streamlined holdings. The accumulation of backlogs eased to a 16-month low. Business optimism also slipped to its lowest level since January.

Dubai bon – oil private sector growth remained steady, with the headline PMI unchanged at 52.9 in May. New order growth in Dubai accelerated to a four – month high.

In Qatar, the finance ministry reported a budget deficit of 0.5 billion riyals ($133 million) for the first quarter of 2025, covered through debt instruments.

Total revenue in the quarter reached 49.4 billion riyals, down 7.5% from the same period last year.  Non – oil revenue contributed 6.9 billion riyals.

Qatar, one of the world's top liquified natural gas (LNG) exporters, has sought to diversify its economy away from hydrocarbons, though it remains reliant on gas revenue for the majority of its government income.