RIYADH, Aug 5 — Saudi Arabia’s non-oil private sector remained firmly in growth territory in July, though momentum slightly cooled, according to the latest Purchasing Managers’ Index (PMI) compiled by S&P Global for Riyad Bank.
The headline PMI eased to 56.3 in July, down from 57.2 in June, but remained well above the neutral 50-point threshold, indicating continued improvement in private sector operating conditions.
📊 Growth Aligns with Vision 2030 Goals
The steady expansion in non-oil activity aligns with Vision 2030, the Kingdom’s ambitious roadmap to diversify its economy and reduce reliance on oil revenues. Saudi Arabia’s economy grew by 3.9% year-on-year in Q2 2025, with the non-oil sector as a major growth engine, according to flash estimates by the General Authority for Statistics.
“Saudi Arabia’s non-oil economy remained on a solid growth track in July, supported by higher output, new business, and continued job creation,” said Naif Al-Ghaith, Chief Economist at Riyad Bank.
📉 What’s Behind the Slight Slowdown?
While July's PMI reading signals healthy expansion, some softening in momentum was noted:
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New order growth moderated, partly due to increased competition and more cautious client spending.
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External demand weakened, with export orders falling for the first time in nine months.
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Purchasing activity grew more slowly, and delivery times improved but were hampered by customs delays.
Despite these factors, firms continued hiring at a robust pace, with July marking another month of strong workforce expansion, following June’s 14-year peak in employment.
📦 Inventory and Input Price Trends
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Inventory levels rose, especially among manufacturers and retailers, indicating confidence in future demand.
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Input prices increased due to higher wage bills as firms raised salaries to retain skilled staff.
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This led to a second straight month of selling price hikes, particularly in services, construction, and manufacturing.
🔮 Outlook: Solid But Watchful
Al-Ghaith noted that firms remain optimistic about future growth, citing:
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Steady domestic demand
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Strong project pipelines
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Government-driven investments under Vision 2030
However, he cautioned that rising costs and global market uncertainty may temper expansion rates in the coming months.
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