Saudi Arabia’s non-oil private business sector continued to show solid growth momentum in December, although the pace of expansion moderated to its slowest level in four months, according to the latest Purchasing Managers’ Index (PMI) survey released on Monday. The seasonally adjusted Riyad Bank Saudi Arabia PMI declined to 57.4 in December from 58.5 in November, marking the second consecutive monthly slowdown. Despite this easing, the index remained comfortably above the 50.0 threshold that separates growth from contraction and slightly exceeded its long-term average of 56.9, underscoring ongoing resilience in the non-oil economy.
The survey highlighted that output across non-oil private businesses continued to rise at a sharp pace, supported by increased new business, ongoing project activity, and sustained investment spending. However, the rate of output growth was the weakest since August, reflecting more cautious demand conditions. New order growth also softened, with the subindex falling to 61.8 in December from 64.6 in November. While firms continued to benefit from improving economic conditions and effective marketing strategies, some reported signs of market saturation and intensifying competition.
Export demand remained positive for the fifth straight month, although the increase was marginal and the weakest in this period. Riyad Bank’s chief economist, Naif Al-Ghaith, noted that external demand continues to provide support but remains uneven, suggesting stability rather than acceleration in overall demand conditions.
Employment growth stayed strong as companies expanded their workforces to meet existing workloads. At the same time, inflationary pressures increased, driven by higher input and purchase costs. These rising expenses were passed on to customers, leading to higher output prices across the non-oil private sector.
Business confidence for the year ahead was more subdued, reflecting concerns over heightened market competition and rising costs. While firms still expect growth, expectations were moderate, pointing to a more cautious outlook despite the sector’s continued expansion.


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