{"id":94096,"date":"2025-02-05T00:00:00","date_gmt":"2025-02-05T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/ksa\/2025\/02\/05\/non-oil-private-sector-at-highest-performance-since-2014-in-january\/"},"modified":"2025-02-05T00:00:00","modified_gmt":"2025-02-05T00:00:00","slug":"non-oil-private-sector-at-highest-performance-since-2014-in-january","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/ksa\/2025\/02\/05\/non-oil-private-sector-at-highest-performance-since-2014-in-january\/","title":{"rendered":"Non-oil private sector at highest performance since 2014 in January"},"content":{"rendered":"

Non-oil sector growth in the Kingdom recorded its best performance since <\/strong>September 2014 in January,<\/strong> with the country seeing the fastest increase in total new orders since June 2011, according to Riyad Bank Saudi Arabia PMI (pdf)<\/a>. The seasonally adjusted headline figure inched up to 60.5, up from 58.4 in December<\/a>, moving it well beyond the 50.0 mark that separates growth from contraction. <\/p>\n

New orders soared during the month:<\/strong> The new orders subindex accelerated to a reading of 71.1 in January, up from 65.5 in the previous month, driven by \u201caccommodative economic conditions\u201d and new infrastructure projects, which helped boost customer orders and total export sales. The index saw the highest rise in new work intakes in a little under 14 years.<\/p>\n

\u201cNearly 45% of firms observed higher sales volumes,<\/strong> attributing this growth to positive economic conditions and the acceleration of infrastructure projects. The rise in export orders further complemented domestic demand, particularly from GCC countries, reflecting effective marketing and competitive pricing strategies,\u201d Riyad Bank Chief Economist Naif Al Ghaith said.<\/p>\n

Purchasing and employment were also up:<\/strong> Firms\u2019 purchasing activity remained positive in January, with 35% of respondents seeing an uplift in the quantity of new inputs bought. The rate of employment was also positive throughout the month, with hiring levels \u201crising solidly.\u201d<\/p>\n

A rise in input costs represented the main downside for the Kingdom:<\/strong> Input price inflation rose at its second-fastest in almost four-and-a-half years in non-oil firms, which many attributed to higher material prices driven by heightened demand and continuing geopolitical tensions. This, in turn, led firms to raise their output prices at the fastest pace in a year.<\/p>\n

Strength in the non-oil sector is not expected to last very long:<\/strong> \u201cIn Saudi at least, we doubt that the strength in its non-oil sector will last as fiscal policy is tightened,\u201d Capital Economics wrote in a note seen by EnterpriseAM Saudi. \u201cWe think GDP growth will accelerate this year as oil output cuts are unwound, but activity in the non-oil sector is likely to soften on the back of a turn to fiscal consolidation,\u201d Capital Economics\u2019 James Swanston wrote in a separate note<\/a>.<\/p>\n

Meanwhile, the <\/strong>World Bank<\/a><\/strong> expects \u201crobust activity in the non-oil sector <\/strong>\u2014 especially in services \u2014 as well as higher oil production and exports,\u201d the bank said in its latest Global Economic Prospects report.<\/p>\n

Driving growth amid Opec+\u2019s oil cuts until April is \u201ca high level of Vision 2030-related <\/strong>investment and socio-economic reforms,\u201d<\/strong> which will represent the key drivers for non-oil growth in the Kingdom, Goldman Sachs Group\u2019s MENA Economist Farouk Soussa told Bloomberg last week.<\/p>\n

Non-oil businesses remain positive over the outlook for the year:<\/strong> Saudi firms remain highly optimistic for the year, with businesses expecting to see sustained growth in demand and supportive market conditions throughout 2025. This has reflected in the Kingdom\u2019s employment trends \u2014 with companies expanding their workforces to meet growing demand \u2014 as well as in supply chain improvements and higher purchasing activity among businesses. <\/p>\n

REFRESHER ON LAST YEAR\u2019S NON-OIL ACTIVITY-<\/strong> Non-oil private sector activity grew at the slowest clip in two years in January 2024, with the first PMI reading<\/a> of last year clocking in at 55.4 before picking up to 57.2 in February<\/a>, and maintaining momentum through to April (57.0)<\/a>. The pace of expansion gradually decelerated from May (56.4)<\/a> to July (54.4)<\/a>, as demand softened and competition intensified, before recovering in August (54.8)<\/a> and gaining further traction in September (56.3)<\/a> and October (56.9)<\/a>. Finally, the headline figure peaked in November (59.0)<\/a>, before slowing in December (58.4)<\/a>, despite a record pick-up in sales and new orders.<\/p>\n

The story was also picked up by <\/strong>Reuters<\/a><\/strong>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

The PMI headline reading accelerated to 60.5 last month<\/p>\n","protected":false},"author":1,"featured_media":94097,"comment_status":"","ping_status":"open","sticky":false,"template":"","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":[27,10,571],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-94096","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","tag-economy","tag-enterpriseam-ksa","tag-pmi","wpautop","entry"],"acf":{"mongo_id":"491fb4f2-1f47-4368-b6bc-26f70fae0091","order":"3","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2024\/8\/22.jpg","photo_position":"above","homepage_title":"","full_issue_title":"Non-oil private sector at highest performance since 2014 in January","related_issue":[94091],"teaser":"The PMI headline reading accelerated to 60.5 last month","voice_url":"https:\/\/s3.us-east-1.amazonaws.com\/ent.news\/audio\/2025\/2\/.9a64b21a-032d-4d84-aa1c-8fbc511b3729.mp3"},"yoast_head":"\nNon-oil private sector at highest performance since 2014 in January - 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