Non-Oil Business Activity Surges in Saudi Arabia
In the heart of the Middle East, Saudi Arabia’s non-oil business sector is experiencing a robust increase in activity, with the latest data reflecting a surge to a six-month peak. The seasonally-adjusted Riyad Bank Saudi Arabia Purchasing Managers’ Index (PMI) for March indicates a slight dip from February’s 57.2 to 57.0. However, it remains firmly above the threshold of 50.0, which signifies expansion in the economic sector.
March’s output sub-index climbed to an impressive 62.2 from 61.5 in February, marking the highest point since the previous September. This uptick was primarily fueled by a swell in new orders, with the manufacturing industry enjoying a particularly strong performance. Naif Al-Ghaith, Riyad Bank’s chief economist, highlighted the robustness of the market, noting that “the strong performance witnessed across various sectors, coupled with the notable increase in order books and new customers, signifies a resilient market poised for growth.”
The burgeoning economic activity has not only led to increased production but has also spurred accelerated purchasing and hiring, painting a picture of a dynamic market with a positive outlook. The new orders sub-index itself leaped to 64.0 in March from February’s 62.2, marking a consistent rise over two months. Foreign sales also saw an uptick for the second consecutive month, albeit at a modest rate.
Government investment plays a pivotal role in bolstering non-oil sectors such as tourism, construction, and manufacturing. These efforts are part of a strategic plan known as Vision 2030, which aims to diversify the kingdom’s economy and reduce its reliance on oil revenues.
Optimism is also reflected in the 12-month business outlook, which has brightened considerably in March, particularly within the construction, wholesale, and retail sectors. This positive sentiment underscores the survey’s findings and suggests that Saudi Arabia’s non-oil sector may continue to thrive in the coming months.
