Saudi non-oil PMI hits highest level since February

Saudi Arabia’s non-oil private sector showed significant improvement in September, marking its strongest performance since February. The Riyad Bank Purchasing Managers’ Index (PMI) rose to 55.3, up from 53.8 in August, according to a report by S&P Global. The increase in new orders reached its fastest pace since February, driven by improving market conditions, higher client numbers, and stronger spending, despite regional tensions disrupting shipping and weighing on business sentiment.

The General Authority for Statistics reported that non-oil activities grew 0.9 percent year on year in the second quarter of 2026, while the Kingdom’s real gross domestic product declined 4.7 percent over the same period. Firms responded to stronger new-order intakes by expanding capacity, adding sales teams and technical staff to support new investments. Naif Al-Ghaith, chief economist at Riyad Bank, noted that the increase in outstanding business, hiring, and purchasing suggests firms are building operational capacity rather than simply responding to temporary demand.

Cost pressures remained elevated in September, with firms reporting sharp increases in material and transport prices. Overall input inflation edged down slightly, but selling charges still rose at a substantial pace, with the rate of inflation the second-fastest in more than six years. Supply disruptions persisted, with delivery times improving only marginally, and greater geopolitical uncertainty contributed to a slower rate of activity growth. Confidence about future output also declined, while demand remained predominantly domestic.