Saudi Non-Oil Sector Sees Strongest Growth in Seven Months

Saudi Arabia's non-oil private sector saw its strongest growth in seven months in September 2026, according to the Riyad Bank Purchasing Managers’ Index (PMI) compiled by S&P Global. The index rose to 55.3 percent, up from 53.8 percent in August, indicating robust expansion in business conditions. The surge was driven by a sharp rebound in new orders, which hit their fastest pace since February, fueled by improving market conditions and increased domestic demand.

In response to the surge in orders, companies ramped up their operational and investment capacities, leading to the highest level of employment activity in seven months. Recruitment focused on technical staff and sales teams, while purchasing activity also saw significant growth, with input purchases reaching a seven-month high. However, foreign demand continued to weaken, with international orders declining for the seventh consecutive month due to supply chain disruptions and regional tensions.

Supply chain data showed only slight improvements in delivery times, with production growth slowing to its lowest level in five months. Rising input costs due to material and transportation expenses led companies to raise selling prices at the second-fastest rate in over six years. The Future Output Index indicated a decline in business optimism for the coming year, reflecting uncertainty from regional disruptions and supply chain issues.

Dr. Naif Alghaith, Chief Economist at Riyad Bank, noted that the results align with the broader economic picture of Saudi Arabia. He highlighted that domestic consumption, investment activity, government projects, and the Public Investment Fund's initiatives continue to support non-oil sector growth. The increase in unfinished work, along with accelerated employment and purchasing, suggests companies are expanding their operational capacities to meet sustained demand.