In November 2024, Saudi Arabia's non-oil private businesses experienced a surge in new orders, leading to increased purchasing and hiring, marking the most significant growth in operating conditions since July 2023, as reported by Riyad Bank and S&P Global. The Riyad Bank Saudi Arabia PMI rose to 59.0 in November from 56.9 the previous month, reflecting a consistent growth trend for the fourth consecutive month, driven by improvements across all five sub-components including new orders, output, employment, suppliers' delivery times, and inventory levels.
This upswing is partly attributed to the kingdom's effective economic diversification initiatives, which bolstered investment spending and attracted positive client responses to marketing campaigns. This enhancement in domestic and foreign sales prompted companies to expand their workforce, resulting in the second-fastest rate of employment growth observed in over a decade.
With the increase in personnel, non-oil businesses managed to slightly decrease their backlogs. Anticipating a rise in demand over the next year, firms increased their input purchases at the quickest rate since March, although this also led to strained supply chains and a decline in vendor performance, reaching a 15-month low.
As order volumes grew in November, inflationary pressures intensified. These pressures were exacerbated by broader geopolitical tensions impacting material prices and elevating transportation costs, causing input costs to rise at the fastest rate in more than four years, coupled with wage increases at the highest rate in over a decade.
Consequently, businesses elevated their selling prices to the most significant level since January. Naif Al-Ghaith, Chief Economist at Riyad Bank, commented, “The acceleration in purchasing activity and inventory expansion suggests businesses are gearing up for continued growth in demand, a reflection of the kingdom's steady progress in broadening its economic base.” He added, “Despite global economic uncertainties, the kingdom's non-oil sector appears well-positioned to maintain its upward trajectory.
Moving forward, maintaining this momentum will be essential to achieving Vision 2030 goals and ensuring long-term economic growth.”.