Saudi Arabia’s non-oil private sector saw improved business conditions in May, as indicated by the Riyad Bank Purchasing Managers’ Index rising to 55.8. This uptick reflects ongoing economic growth, with the index remaining well above the threshold that signals expansion.
The PMI’s increase from April highlights a rebound in new orders, driven by stronger demand, better sales, and active industrial development. Although foreign orders grew, their pace was the slowest in seven months.
Output continued to rise, particularly in the construction sector, although the overall rate of growth softened for the fourth consecutive month. Employment surged, marking one of the fastest increases in staffing in over ten years, as companies expanded to meet higher output needs.
Business confidence has strengthened, reaching its highest level since late 2023. Firms are expanding teams, especially in operations and sales, to support ongoing growth.
Purchasing activity hit a 14-month peak, but companies exercised caution with inventory buildup. Input costs climbed due to higher supplier prices, while wage inflation eased. Despite these pressures, firms reduced selling prices, mainly because of lower service charges and heightened competition.
The survey, based on responses from approximately 400 companies across key sectors, points to stable and confident growth in Saudi Arabia’s non-oil economy midway through the second quarter.