Non-Oil Business Activity Grows in Saudi Arabia and UAE in August
The non-oil private sector continued to expand in both Saudi Arabia and the UAE during August. While Saudi Arabia saw steady improvement, the UAE’s growth was slightly slower due to weaker sales.
Saudi Arabia’s Non-Oil Growth
Saudi Arabia’s non-oil economy showed another month of strong performance. The Riyad Bank Saudi Arabia Purchasing Managers’ Index (PMI), which tracks business activity, rose to 56.4 in August, up from 56.3 in July. A score above 50 means the economy is expanding, while below 50 signals contraction.
This improvement shows that demand in Saudi Arabia is still healthy. Companies reported higher orders, stronger output, and more hiring activity. Although the rise in growth was small, it still points to steady progress in the private sector.
A key driver of this growth was better export demand. Businesses said they received more international orders, especially after increasing their marketing efforts in other markets and working more closely with clients in the Gulf region.
Employment also continued to improve. Many companies added new staff to handle both current work and future projects. Although the speed of hiring was slightly slower compared to previous months, it still remained strong by historical standards.
Naif Al-Ghaith, chief economist at Riyad Bank, noted that overall employment conditions in the private sector were positive, with businesses confident about future demand.
UAE’s Non-Oil Private Sector
In the UAE, the non-oil private sector also grew in August, though at a more cautious pace. The S&P Global UAE PMI increased to 53.3, up from 52.9 in July, which was the lowest level in over four years.
The main driver of this growth was stronger output. Businesses reported that activity increased at the fastest pace in six months, boosted by ongoing projects and higher demand in local markets. This rise was also slightly better than the long-term average for the survey.
Some companies said that higher sales, new project work, and stronger local demand helped support growth.
However, challenges remain. The New Orders Index, which measures company sales, fell to its lowest level since June 2021. This shows that new business is not rising as quickly as before. Some firms reported facing tough competition, while others said supply chain issues made it harder to close deals.
Because of weaker new orders, many companies had to rely more on existing projects and backlogs of work to maintain output growth.
David Owen, senior economist at S&P Global Market Intelligence, explained that the slowdown in new sales raised concerns about the UAE’s growth momentum in the months ahead.
Outlook
Overall, both Saudi Arabia and the UAE maintained growth in their non-oil economies during August. Saudi Arabia’s expansion was steady, supported by stronger demand, exports, and hiring. The UAE also recorded growth, but pressure from weaker sales and competition could weigh on its momentum.
The latest figures highlight that while the region’s non-oil sectors remain resilient, businesses must continue adapting to market challenges, both locally and internationally.
Published: 5th September 2025
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