Saudi Arabia's non-oil business activity reached its highest level in 16 months this November due to strong demand
Saudi Arabia’s non-oil business activity reached its highest level in 16 months this November due to strong demand
The non-oil business sector in Saudi Arabia grew in November at its fastest pace in 16 months, driven by strong demand, according to a business survey.
PMI Increases
The Riyad Bank Saudi Arabia Purchasing Managers’ Index (PMI) rose to 59 in November, up from 56.7 in October. This is the fourth month in a row of growth.
A PMI above 50 means business activity is growing, and the latest reading shows significant improvement for non-oil companies, according to a survey by S&P Global.
Business activity in Saudi Arabia grew at its fastest rate since July 2023, driven by a rise in new orders. Strong demand, more customers, increased investment spending, and positive reactions to marketing efforts were all contributing factors.
Saudi businesses also saw an increase in foreign sales after a small dip in the previous month.
The report suggests that Saudi Arabia’s economy is attracting more foreign investment, boosting consumer confidence, and improving trade relationships.
Even with global economic challenges, Saudi Arabia’s non-oil sector is expected to continue growing.
The survey also found that more jobs were created to meet demand, which helped businesses manage their workloads and reduce backlogged work.
Additionally, businesses increased their inventory volumes in November, buying inputs at the fastest rate since March, in anticipation of higher sales.
The PMI is based on five factors: new orders, output, employment, and supplier delivery times.
Important quote
“This strong growth, with higher production and demand, shows that non-oil sectors are becoming more able to drive economic activity without depending on oil prices,” said Naif Al-Ghaith, chief economist at Riyad Bank.
“The increase in business activity and rising inventories show that companies are preparing for more demand, which reflects the country’s ongoing progress in expanding its economy. Also, the growth in jobs shows that non-oil sectors are becoming better at creating employment, which supports the goal of increasing national employment,” he added.
Economic growth
Saudi Arabia’s economy grew by 2.8% compared to last year in the third quarter of 2024, mainly due to the rise in non-oil sectors, according to official data from October.
The non-oil sector grew by 4.2% in the third quarter, while the oil sector saw a small decline of 0.3%. The Saudi government has been investing a lot to reduce its reliance on oil as part of its Vision 2030 plan.
Published: 3rd December 2024
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