Saudi Arabia’s non-oil private sector sustained strong growth in February 2025. Robust customer demand, rising employment, and a positive economic outlook fueled expansion despite a slight dip from January’s decade-high PMI. Riyad Bank’s latest Purchasing Managers’ Index (PMI) registered 58.4, down from January’s 60.5. However, business conditions stayed robust, supported by steady new orders and export gains.
Analysts linked the PMI dip to slower new order growth after January’s surge. The new orders subindex fell to 65.4 in February, down from 71.1. Additionally, tourism inflows and targeted marketing campaigns bolstered sales. Output growth eased marginally but remained near mid-2023 peaks, reflecting resilient sector activity.
Employment Soars to 16-Month High
Job creation hit a 16-month high as firms expanded workforces to meet rising demand. Manufacturing and services sectors led hiring, signaling confidence in future workloads.
Naif Al-Ghaith, Riyad Bank’s Chief Economist, stated, “Businesses remain optimistic despite slower order growth. Workforce expansions show readiness for 2025 demand.”
Export orders climbed sharply, highlighting strong international appetite for Saudi non-oil goods. Firms attributed growth to competitive pricing and diversified customer bases. Moreover, over 35% of surveyed companies reported higher new orders, while only 5% saw declines. This gap underscores resilient domestic and global demand. Input costs rose due to material prices and wages, but inflation slowed slightly. Competitive markets limited selling price hikes, ensuring affordability for buyers.
Business optimism reached a 15-month high, driven by economic reforms and government support. Firms expect sustained momentum through 2025, backed by supply chain improvements.
Al-Ghaith emphasized, “Strengthening supply chains and rising demand signal steady growth ahead.” Non-oil sectors, powered by tourism and domestic spending, remain key to Saudi Arabia’s diversification goals.
With employment and exports rising, the Kingdom’s non-oil economy stays on track for a transformative year.
