In January, Saudi Arabia's non-oil private sector witnessed its fastest growth in over ten years, propelled by a notable surge in new orders, according to a report released by S&P Global on Tuesday.
The Riyad Bank Purchasing Managers' Index climbed to 60.5 in January, up from 58.4 in December. A reading above the 50 mark indicates an expansion in the sector.
New orders experienced their most significant growth in more than thirteen and a half years, as favorable economic conditions contributed to a robust increase in customer orders, with several firms benefiting from newly initiated infrastructure projects.
A notable rise in foreign demand also played a crucial role in this upswing in new orders. The growth in new export orders reached its highest level in 18 months.
Favorable demand conditions facilitated the non-oil sector in boosting activity levels, employment, and input purchases in January.
Regarding pricing, input price inflation accelerated to the second-fastest rate in almost four and a half years. Increased cost pressures were primarily due to higher material costs driven by stronger demand and geopolitical tensions, prompting firms to raise output prices at the fastest rate observed in a year.
"The outlook for the non-oil economy remains highly optimistic, with businesses anticipating continued demand growth and favorable market conditions through 2025," stated Naif Al-Ghaith PhD, Chief Economist at Riyad Bank.
