Saudi boom for non-oil businesses lifts activity to 7-year peak

The non-oil private sector in Saudi Arabia grew at the fastest pace in seven years in November, boosted by a substantial increase in new orders.

The Riyad Bank Purchasing Managers’ Index, adjusted for seasonal factors, rose to 58.5 points in November from 57.2 points in October.

It recorded its highest reading since September 2021, with a significant rise from the 50-point level that separates growth from contraction.

New order growth accelerated to a 14-month high, prompting increased purchases on the back of improving economic conditions and increasing demand and investment.

The production sub-index, which measures business activity, rose to 64.6 points in November from 61.3 points in the previous month.

The new orders sub-index rose to 65.7 points from 62.9 points in October.

The survey showed that the manufacturing, construction, wholesale and retail sales, and services sectors recorded significant growth.

Besides the strong domestic performance, new exports registered the fastest increase since November 2015.

According to Nayef Al-Ghaith, chief economist of Riyad Bank, “the non-oil sector of the Saudi economy continued to rise in November, and business conditions generally improved in light of rising demand.”

He added, “There is an improvement in companies’ expectations as a result of the continuous implementation of (Vision 2030) initiatives, which provides confidence in expectations for future production in the non-oil sector.”

November witnessed a more moderate employment rise compared to previous surveys’ data. In addition, increased global inflationary pressures led to higher costs and a faster increase in excise duties.