Saudi Arabia's Non-Oil Business Sector Growth

ABU DHABI (Reuters) – Saudi Arabia's non-oil business sector experienced a significant growth in November, achieving the fastest rate since July 2023, driven by strong demand, according to a recent business survey.

The seasonally adjusted Riyad Bank Saudi Arabia Purchasing Managers' Index (PMI) rose to 59.0 in November from 56.9 in October. This marks the fourth consecutive monthly increase in the headline PMI, indicating continued growth as it remains well above the neutral mark of 50.0.

The new orders subindex climbed to 63.4 in November from 62.5 the previous month, reflecting an expansion in customer bases and increased investment spending, as noted by survey respondents.

Naif Al-Ghaith, Riyad Bank's chief economist, commented, "This robust expansion, marked by accelerated output and demand, reflects the increasing capacity of non-oil sectors to contribute to economic activity independently of oil price fluctuations."

The output subindex also saw an increase to 63.8 in November, up from 60.2 in October. Additionally, firms reported a faster rate of job additions compared to the previous month.

Looking ahead, Saudi Arabia is projecting a fiscal deficit of $27 billion in 2025 while continuing strategic spending on Vision 2030 projects aimed at transforming the economy and enhancing non-oil growth, despite the impact of lower oil prices on revenues.

However, businesses' confidence regarding the 12-month outlook decreased from October, although it remains roughly aligned with the year-to-date average for 2024.