RIYADH: Saudi Arabia’s non-oil private sector ended 2025 on a positive note, supported by continued growth in business activity, rising new orders and an expansion in employment, an economy tracker showed. 

According to Riyad Bank’s Purchasing Managers’ Index, compiled by S&P Global, the Kingdom’s PMI stood at 57.4 in December, down from 58.5 in November.

The index remained well above the neutral 50 mark, signaling sustained expansion across Saudi Arabia’s non-oil economy. 

The strong growth of Saudi Arabia’s non-oil sector underscores the progress of the Vision 2030 agenda, which aims to diversify the Kingdom’s economy by reducing its reliance on crude revenues. 

Naif Al-Ghaith, chief economist at Riyad Bank, said: “Saudi Arabia’s non-oil private sector closed the year with a solid expansion, as the headline PMI eased to 57.4 in December, with activity continuing to expand despite some loss of momentum.” 

He added: “Output growth remained solid, supported by sustained domestic demand, project approvals, and ongoing business investment, even as the pace of growth eased to its slowest since August.” 

According to the report, non-oil firms were able to boost activity in December due to increased new business, work on existing projects and heightened investment spending. 

The volume of new orders received by non-oil companies rose sharply during the month, although the pace of growth eased to its softest level since August. 

Survey participants said the rise in new orders was driven by improving economic conditions, the acquisition of new clients, the launch of new contracts and successful marketing campaigns. 

“New orders stayed above the expansion threshold, signalling continued demand inflows. Export demand recorded a marginal increase for the fifth consecutive month, but the latest rise was the weakest in this sequence, suggesting that external demand remains supportive but uneven,” said Al-Ghaith. 

He added that demand conditions in December pointed to resilience rather than acceleration as firms navigated a more competitive environment. 

Employment growth among non-oil companies remained strong in the final month of 2025 and broadly in line with November’s pace, although it was softer than the peak recorded in October. 

Despite increasing their workforce, companies reported a further rise in work-in-hand during the month, with the rate of backlog accumulation reaching its highest level since July.

The report also showed that purchasing activity expanded at its fastest pace in three months in December, contributing to a sharper rise in input stocks compared to November, supported by a notable improvement in suppliers’ delivery times.

Looking ahead, business optimism softened, with companies citing rising competition as a concern for future growth. 

“The Future Output Index stayed above the neutral mark, indicating expectations of growth into 2026, but fell to its lowest level since July, reflecting more cautious confidence,” concluded Al-Ghaith.