Daijiworld Media Network - Riyadh
Riyadh, Feb 3: Saudi Arabia’s non-oil private sector continued to expand at the start of 2026, though at a slower pace than the previous month, as rising demand supported business activity despite mounting cost pressures, a survey showed on Tuesday.
The seasonally adjusted Riyad Bank Saudi Arabia Purchasing Managers’ Index (PMI) declined to 56.3 in January from 57.4 in December, marking its lowest reading in six months, but remaining firmly in expansion territory. A PMI reading above 50 indicates growth, while below 50 signals contraction.
Business activity remained supported by strong market demand, new project approvals and improved client activity. However, growth in new orders was largely flat during the month. The New Orders sub-index edged up marginally to 61.9 in January from 61.8 in December, driven by favourable domestic conditions and an increase in export sales, particularly to GCC and Asian markets. At the same time, companies reported that rising foreign competition posed challenges in securing international clients.
“Survey evidence points to ongoing strength in output and sales, underpinned by newly approved projects, steady customer enquiries, and improved investor activity, even as growth momentum moderated,” said Naif Al-Ghaith, chief economist at Riyad Bank.
Employment growth eased to its slowest pace in a year, despite a continued increase in staffing levels, as firms focused on hiring workers with specialised technical skills.
Cost pressures intensified for the second consecutive month, with businesses citing higher prices for key inputs such as metals and fuel, along with rising wage costs.
Saudi Arabia’s economy grew by 4.5 per cent in 2025, according to flash government estimates, and nearly 5 per cent in the fourth quarter, supported by robust non-oil sector performance.
Despite cost challenges and slower growth momentum, firms remained optimistic about future output in January, supported by rising orders and resilient overall economic conditions.