Saudi Arabia’s non-oil private sector experienced slower growth during February, recording the weakest expansion in nine months while wage pressures continued mounting, according to the latest index data released Tuesday.
Overall business conditions stayed robust throughout the month, with the headline index remaining comfortably above the neutral 50.0 threshold that separates expansion from contraction. Sub-indices measuring output and new orders continued signaling a favorable operating environment for companies across the Kingdom.
The survey highlighted that non-oil business activity recorded its softest expansion rate in nine months during February. Nonetheless, both demand and output maintained solid growth trajectories, further strengthening the labor market significantly. Consequently, companies drove the sharpest increase in wage costs since the survey began operations.
Output Growth Eases but Remains Substantial
While growth in non-oil output eased to a six-month low, it remained substantial throughout February. Survey respondents frequently cited improved customer demand and rising approvals for new projects as key drivers. However, some participants pointed to competitive pressures across various markets as factors weighing on overall growth rates.
The data also showed that order volumes increased significantly in February across multiple sectors, with companies largely attributing the expansion to stronger domestic sales throughout the Kingdom. Respondents noted that supportive government policies, improved customer spending, intensified sales initiatives, digital business development, and collaborative client projects all contributed to higher new business volumes. Firms also reported a surge in international orders, despite the moderate pace of growth overall.
