Strong demand continued to drive growth in Saudi Arabia’s non-oil business sector in December, although the pace was slightly slower than in November, according to a survey released on Sunday.
The seasonally adjusted Riyad Bank Saudi Arabia Purchasing Managers’ Index (PMI) dropped to 58.4 in December, down from a 17-month high of 59.0 in November. Despite the decline, the PMI remained well above the 50.0 mark, which indicates growth.
New orders increased for the fifth straight month, supported by strong domestic demand and a rise in exports. The subindex rose to 65.5 in December from 63.4 in November, marking the fastest pace of growth recorded in 2024.
“Saudi Arabia’s non-oil private sector ended 2024 on a high note, reflecting the successful strides made under Vision 2030,” said Naif Al-Ghaith, Chief Economist at Riyad Bank, highlighting the government’s economic diversification efforts.
Cost pressures remained a challenge, with input prices rising sharply due to high demand for materials. However, wage inflation eased, helping to offset some of the overall cost increases.
Business expectations reached a nine-month high in December, as firms expressed optimism about continued growth in 2025. Al-Ghaith noted that Saudi Arabia’s non-oil GDP is expected to grow by more than 4% in 2024 and 2025, supported by significant improvements in business conditions.
The Saudi government plans to increase strategic spending on large-scale projects to meet Vision 2030 targets, particularly for elements with tight deadlines. In December, Saudi Arabia was officially announced as the host nation for the 2034 soccer World Cup, underscoring the kingdom’s push to enhance its global presence.
