{"id":106921,"date":"2026-04-06T00:00:00","date_gmt":"2026-04-06T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/ksa\/?p=106921"},"modified":"2026-04-06T03:56:23","modified_gmt":"2026-04-06T03:56:23","slug":"non-oil-sector-braces-for-geopolitical-storm-as-pmi-dips-below-50","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/ksa\/2026\/04\/06\/non-oil-sector-braces-for-geopolitical-storm-as-pmi-dips-below-50\/","title":{"rendered":"Non-oil sector braces for geopolitical storm as PMI dips below 50"},"content":{"rendered":"

T<\/strong>he non-oil private <\/strong>sector has contracted \u2014 <\/strong>for the first time in over 5.5 years<\/strong>. <\/strong>The headline Purchasing Managers\u2019 Index (PMI) tumbled to 48.8 in March \u2014 a sharp drop from 56.1 in February<\/a>, according to the Riyad Bank Saudi Arabia PMI (pdf)<\/a>. The 7.3-point drop is the second-largest decline in the survey\u2019s history, eclipsed only by the initial pandemic shock of March 2020.<\/p>\n

Geopolitical instability is doing most of the damage. <\/strong>Non-oil firms saw new business drop sharply as the regional war pushed clients to delay spending and shelve new projects pending clarity on the conflict, the report noted. Export orders were hit particularly hard, falling at their fastest rate in nearly six years.<\/p>\n

Local logistics are also under strain.<\/strong> \u201cThere is a decline in new orders and local purchasing power, or at least in consumer confidence, which has led to a reduction in production and supply,\u201d MENA Economist Hamzeh Al Gaaod tells EnterpriseAM. Transport costs have spiked as industries \u2014 particularly oil production \u2014 shift operations from the east to the west to secure exports, leading to \u201ctime delays and increased costs,\u201d he said.<\/p>\n

The backlog paradox: <\/strong>Though new business has slowed, work is piling up. Backlogs grew at their fastest pace since 2018 driven by freight delays and rising transport costs, while supplier delivery times hit their worst level since June 2020. This buildup suggests that \u201cunderlying demand remains present,\u201d Riyad Bank Chief Economist Naif Al-Ghaith noted in the report, adding that \u201cfirms responded prudently by adjusting purchasing activity, while inventory levels stayed relatively well-positioned.\u201d <\/p>\n

There is a modest silver lining: <\/strong>Input cost inflation eased to its slowest pace in a year on softer wage pressures and weaker demand. Employment also continues to expand in March, albeit at a slower pace. Al Ghaith attributed this to firms continuing to hire \u201cto meet local workforce targets\u201d and manage supply pressures.<\/p>\n","protected":false},"excerpt":{"rendered":"

The 7.3-point drop is the second-largest in the survey\u2019s history, eclipsed only by the shock of March 2020<\/p>\n","protected":false},"author":1,"featured_media":106922,"comment_status":"closed","ping_status":"open","sticky":false,"template":"single-feature.php","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2571],"tags":[27,10],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-106921","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","tag-economy","tag-enterpriseam-ksa","wpautop","entry"],"acf":{"mongo_id":"915190be-b5f5-48b9-9da7-ddd05bec5751","order":"3","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2026\/4\/253.jpg","photo_position":"above","homepage_title":"","full_issue_title":"War sends non-oil private sector growth into contraction","related_issue":[106917],"teaser":"The 7.3-point drop is the second-largest in the survey\u2019s history, eclipsed only by the shock of March 2020"},"yoast_head":"\nNon-oil sector braces for geopolitical storm as PMI dips below 50 - 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