Maintaining this momentum will be essential to achieving the goals of Vision 2030 and ensuring long-term economic growth.
Saudi Arabia’s non-oil private sector ended November with strong momentum, with business activity expanding at its fastest pace since July 2023, the latest business survey showed.
According to the newspaper, Economic Saudi Arabia, The Riyad Bank Purchasing Managers’ Index (PMI) for Saudi Arabia rose to 59 in November from 56.9 in October, marking the fourth consecutive monthly increase, supported by accelerated growth in new orders, purchasing activity and staff hiring.
The headline PMI, calculated as a weighted average of sub-indices covering new orders, output, employment, suppliers’ delivery times and inventory levels, reflects a significant improvement in operating conditions, with all five components contributing to the rise.
Continued success of economic diversification efforts
Naif Al-Ghaith, Chief Economist at said:Riyadh Bank“ Strong growth in Saudi Arabia’s non-oil private sector helped the Purchasing Managers’ Index (PMI) reach 59 in November, indicating the continued success of economic diversification efforts.”
He added: “This strong expansion, characterised by accelerating production and demand, reflects the increasing ability of non-oil sectors to contribute to economic activity independently of oil price fluctuations.”
Business activity saw its biggest increase in 17 months, with firms linking the increase to increased demand, increased customer volume and successful marketing campaigns. New order flows, including foreign sales, rebounded after a modest decline in the previous survey period.
Employment growth
Employment growth also picked up, with companies expanding their workforces at the second-fastest pace in more than a decade, driven by the need to manage growing workloads.
Al-Ghaith pointed out that “employment growth indicates an increase in the ability of non-oil sectors to absorb workers, which supports social and economic goals such as increasing national employment.”
Companies ramped up purchases of inputs at the strongest rate since March to build inventories in anticipation of higher sales. However, that strained supply chains, leading to the slowest improvement in vendor performance in 15 months.
Wage inflation
The report noted that the sector’s rapid expansion brought inflationary pressures to the fore. Input costs rose at the fastest pace in more than four years, driven by higher wages, geopolitical tensions and increased transportation costs. Wage inflation hit a 10-year high, while companies raised selling prices at the fastest rate since January to offset these pressures.
“Strong purchasing activity and expanding inventory indicate that companies are preparing for continued growth in demand,” Al Ghaith said.
“This performance is in line with broader economic trends that demonstrate Saudi Arabia’s ability to attract foreign investment, boost consumer confidence, and foster business partnerships,” he added.
A strong November PMI underscores the resilience of Saudi Arabia’s non-oil economy despite global uncertainty. Businesses remain optimistic about future growth, supported by government initiatives to diversify the economy under Vision 2030.
