Saudi Arabia’s non-oil private sector recorded one of its strongest expansions since 2014 in October, supported by solid demand and increased hiring activity.
However, rising cost pressures led to the sharpest output price increases in more than two years, according to the latest Riyad Bank Purchasing Managers’ Index (PMI) survey.
The Riyad Bank PMI climbed from 57.8 in September to 60.2 in October, signalling the second-fastest rate of growth since 2014.
“The acceleration was driven by broad-based gains in output, new orders, and employment, reflecting sustained demand momentum and continued strength in the non-oil economy,” said Naif Al-Ghaith, Chief Economist at Riyad Bank. “The latest data points to a strong start to the final quarter, supported by both domestic and external demand.”
New orders rose for the third consecutive month, with 48% of surveyed firms reporting higher sales, driven by improved economic conditions, a growing client base, and stronger foreign investment.
Output and employment saw robust increases, with job creation reaching its highest level in nearly 16 years.
Meanwhile, input costs surged sharply, mainly due to wage hikes linked to salary adjustments and bonuses, as well as higher prices for imported raw materials. These cost pressures pushed output price inflation to its fastest pace since May 2023.
Looking ahead, firms in the non-oil sector remained optimistic about future business activity, though confidence slightly eased from September levels.
Strong demand, ongoing project work, and continued government investment were cited as key factors underpinning business optimism, the survey showed.
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