Saudi Non-Oil Private Sector’s Performance Amid Growth Deceleration

Recent significant swings in Saudi Arabia’s non-oil private sector are indicative of the financial difficulties the nation’s businesses and institutions are confronting.

Recent data demonstrates shifts in this crucial sector’s growth, which calls for a review of its major metrics and a study of how they affect the economy as a whole. The most important and up-to-date information will be presented in this post.

Saudi Arabia’s Non-Oil Private Sector

According to the Purchasing Managers’ Index (PMI) from Riyadh Bank, wage pressures led to a slowdown in growth in Saudi Arabia’s non-oil private sector in February. The index’s largest decline over the previous nine months occurred when it fell to 56.1 from 56.3 in January, although it was still above the 50-point threshold that distinguishes expansion from contraction.

Demand and output stayed strong despite the downturn, with increased client demand and project approvals, indicating a rise in both domestic and foreign demand, albeit at a slower rate than before.

Read more: Saudi Non-Oil Sector Surges as PMI Hits 59.6 in June

Sustainable Private Sector Growth & Greater Employment

In light of recent events, Saudi Arabia’s non-oil private sector has continued to grow steadily, helped along by a continuous stream of project approvals and strong domestic demand. For more than seven months in a row, this industry continued to rise thanks to higher overseas sales and better new orders. The February statistics show that the economy is doing well and is heading toward more stability and lasting balance.

The labour market’s employment growth rate reached its highest point in four months in February, when statistics revealed a notable increase in the number of workers due to a spike in new projects and increasing activity.

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Since 2009, Employment Rates have Risen

Due to a backlog of incomplete work and increased sales, employment has grown at one of its fastest rates, reaching a four-month high. In the meantime, labour expenses have increased at the quickest rate since data gathering started in August 2009 as businesses pay more to keep employees, especially those in technical and sales positions.

Despite comparatively reduced gasoline costs, enterprises reported sustained pressure from supplier fees and metal prices, which corresponded with the fastest increase in selling prices since May 2023. Concurrently, operational enhancements and supplier modifications helped speed up supply chains, resulting in the fastest improvement in supplier delivery times in nine months.

According to Naif Al-Ghaith, chief economist at Riyadh Bank, the non-oil private sector is still growing, driven by domestic demand and new projects, despite a reduction in pace compared to prior months. He remarked that the increase in employment demonstrates businesses’ confidence in demand in the coming months. It is worth noting that the data was taken between February 10 and 19, 2026.

In conclusion, despite the few difficulties it has lately encountered, Saudi Arabia’s non-oil private sector continues to be a vital pillar for bolstering economic growth and stability. With sustained domestic demand, support for new initiatives, and increased job possibilities, current indicators show the industry’s capacity to adjust to shifting circumstances. This fact is encouraging for a more sustainable and balanced future for the country’s economy.

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