New Business Boom Drives Growth in Saudi Arabia's Non-Oil Private Sector
Saudi Arabia’s non-oil private sector has experienced a significant growth surge, driven by a remarkable boom in new businesses. This surge, as indicated by the latest data from the Purchasing Managers’ Index (PMI) provided by Riyad Bank, showcases the country’s commitment to diversifying its economy and reducing its reliance on oil revenues.
According to Naif Al-Ghaith PhD, Chief Economist at Riyad Bank, the non-oil private sector in Saudi Arabia continued its strong growth trajectory in the second quarter of the year. This growth was driven by an increase in new business inflows, particularly in the construction and tourism sectors.
The output and new orders sub-indices experienced a significant acceleration, reaching multi-year record rates. This boost led to a headline PMI of 59.6, surpassing the long-term trend level. Although slightly lower than February’s peak, which was the highest in eight years, the current PMI still reflects robust growth.
The survey conducted by PMI also revealed that employment opportunities continued to grow, with some companies even offering higher wages to retain experienced staff. Overall, employment growth gained momentum and reached its strongest level since August 2015.
These findings indicate a positive outlook for the non-oil private sector in Saudi Arabia. The accelerated growth, fueled by new business inflows, showcases the resilience and competitiveness of the sector. Additionally, the increase in employment opportunities contributes to the overall economic development of the country.
With the construction and tourism sectors experiencing significant growth, the non-oil private sector is playing a vital role in diversifying Saudi Arabia’s economy. This growth trajectory highlights the successful implementation of economic policies aimed at reducing dependence on oil revenues and creating a sustainable business environment.
As the non-oil private sector continues to thrive, it presents attractive opportunities for both domestic and foreign investors. The steady growth, coupled with the government’s commitment to economic diversification, positions Saudi Arabia as an emerging hub for business and investment.
