Saudi Arabia’s efforts to diversify its economy through the ambitious Vision 2030 reforms are yielding significant results, as demonstrated by the nation’s latest non-oil economic data. The Kingdom’s non-oil private sector has shown robust acceleration, with the Purchasing Managers’ Index (PMI) climbing to 60.2 in October.
This outstanding figure, which is up from 57.8 in September, marks one of the strongest PMI readings in over a decade, underscoring the sustained momentum of the non-oil economy and the success of diversification strategies. The 50.0 mark separates expansion from contraction, making the 60.2 score indicative of sharp growth.
Solid Operating Conditions Drive Private Sector Confidence
The Riyad Bank and S&P Global survey reveals a sharp improvement in operating conditions across the Saudi private sector. This positive performance is primarily underpinned by solid customer demand, increasing employment levels, and robust output growth.
Naif Al-Ghaith, Chief Economist at Riyad Bank, commented on the findings, stating that the acceleration was “driven by broad-based gains in output, new orders, and employment, reflecting sustained demand momentum and continued strength in the non-oil economy.” He further noted that the results indicate a strong start to the final quarter of the year, supported by both domestic and external demand.
Key Drivers of Economic Momentum
The significant rise in the PMI is attributable to several key indicators:
- Accelerating New Orders: The pace of growth in new orders received by non-oil companies accelerated for the third consecutive month. Surveyed firms attributed the rise in sales to favorable economic conditions, an expanding client base, and a reported surge in foreign investment.
- Record Job Creation: Output and employment expanded sharply during the month, with job creation rising at the fastest pace in nearly 16 years. This reflects businesses actively expanding capacity to meet increased workloads and capitalize on new opportunities.
- Increased Global Competitiveness: The persistent rise in new export orders highlights the growing global competitiveness of Saudi firms and the success achieved through ongoing diversification initiatives.
Vision 2030: Fueling the Future
The sustained growth aligns with the Kingdom’s forward-looking projections. Saudi Arabia’s Minister of Economy and Planning, Faisal Alibrahim, stated that the nation’s Gross Domestic Product (GDP) is expected to expand by 5.1 percent in 2025, an outlook largely supported by the continued strength in non-oil activities.
While the data indicated a rise in input costs for non-oil firms—primarily due to wage increases resulting from salary revisions and bonuses—companies remain highly optimistic. Their positive outlook is anchored in solid domestic demand, the continued progress of megaprojects, and ongoing government investment initiatives.
The overall sentiment reflects deep confidence in the economy’s continued expansion and the inherent strength of the newly diversified non-oil private sector.
Source Note: Original article published by Arab News
