Saudi Arabia's Non-Oil Economy Maintains Growth Amid Export Order Decline

Saudi Arabia's non-oil private sector continued to grow in July, despite a decline in export orders and a slight decrease in business confidence. The Purchasing Managers' Index (PMI) eased to 53.1 from 53.3 in June, still above the 50-mark that indicates growth.

The PMI data showed a mixed picture for Saudi businesses. Domestic demand remained strong, with new orders and business activity increasing, although at a slower pace than in June. In contrast, export orders fell for the fifth consecutive month due to factors such as the Middle East conflict, higher freight costs, and increased competition.

Riyad Bank Chief Economist Naif Al-Ghaith noted that input costs rose at their slowest pace in four months, with purchase-price increases softening. Firms still raised their selling prices, but inflation cooled slightly due to better supplier performance, faster delivery times, and stronger local sourcing. Hiring picked up after a pause in June, although job growth remained below earlier levels.