Saudi Arabia’s Non-Oil Sector Growth Slows in April as New Orders Weaken: PMI

Photography: Courtesy of SPA.

Riyadh, May 6, 2025 (Saudi Arabia Breaking News) – Growth in Saudi Arabia’s non-oil private sector eased in April as expansion in new orders slowed sharply, though employment levels rose at one of the fastest rates in over a decade, according to a business survey released on Monday.

The seasonally adjusted Riyad Bank Saudi Arabia Purchasing Managers’ Index (PMI) fell to 55.6 in April from 58.1 in March—marking the lowest reading since August 2024. While the index remains above the 50.0 threshold that separates growth from contraction, the latest data indicates a moderation in the pace of expansion.

The survey attributed the deceleration primarily to weaker new order growth, impacted by global economic headwinds and intensified market competition. The new orders subindex dropped for the third consecutive month, reaching 58.6 in April, down from 63.2 in March.

“While output growth remains robust, it is somewhat tempered by global economic uncertainties and competitive pressures affecting client spending,” said Naif Al-Ghaith, Chief Economist at Riyad Bank.

Despite the slowdown in new demand, the survey pointed to strong labor market dynamics, with employment rising at the joint-fastest pace in over a decade. Companies reportedly increased staffing in response to sustained growth in business activity and a need to expand capacity.

April’s survey also showed softer sentiment on future output, with business optimism falling below the long-term survey average. Firms remain cautious in their forecasts amid broader economic uncertainties.

Saudi Arabia’s economy grew by 2.7% in the first quarter of 2025, largely driven by non-oil sector activity, as the Kingdom continues to diversify its economy under Vision 2030. Recent updates by the General Authority for Statistics have expanded data collection methodologies, increasing the weight of the non-oil sector to align more closely with international reporting standards and improve overall data quality.

While short-term challenges persist, analysts expect the Kingdom’s economic fundamentals and policy support to sustain non-oil growth momentum over the medium term.