How the KSA + Kuwait + Qatar + Egypt’s non-oil private sectors fared in May: Purchasing manager indices (PMI) tracking non-energy sectors saw varying results in the four countries in May, with the three Gulf countries seeing their non-oil activity remain in the green, while Egypt inched closer towards expansion territory.

REMEMBER- The all-important 50.0 mark is the threshold separating contraction from growth. Anything above 50 denotes expansion, while anything below indicates contraction.

SAUDI ARABIA–

Non-oil business activity in the Kingdom accelerated in May, driven by an expansion in new business due to improvements in demand and business sentiment, according to the Riyad Bank Saudi Arabia PMI (pdf). The seasonally adjusted headline figure came in at 55.8 in May, up slightly from 55.6 in April.

New orders rose substantially during the month: The new orders subindex rose to 62.5 in May, up from 58.6 in April, breaking a three-month spell of decline, according to Reuters. The new orders index was the only sub-component to rise in May, with businesses linking this to “increased demand, strong sales performances, industrial development and new marketing initiatives,” the report reads.

Purchasing activity also continued to rise, accelerating to a 14-month high despite “greater caution towards stockpiling,” according to the report.

This came in tandem with a rise in input prices — albeit at a slower pace than the previous month, with the slowdown coming due to subdued wage pressures. However, output prices fell in May due to a sharp decrease in service sector charges. “Output prices reverted into the contractionary territory due to competitive market conditions with the service sector leading the reduction, contrasting with rising prices in manufacturing, construction and wholesale & retail,” National Bank of Kuwait’s Issa Hijazeen told EnterpriseAM.

The future’s looking bright for Saudi businesses: “Looking ahead, sentiment among non-oil firms has strengthened visibly. Business expectations looking forward reached their highest level since late 2023. Hiring momentum remained strong as companies expanded teams to support output growth, particularly in operations and sales. Together, these indicators point to a non-oil sector that remains firmly in expansion territory — buoyed by resilient demand, growing confidence, and operational readiness for continued growth in the second half of the year,” Riyad Bank’s chief economist Naif Al Ghaith said.

KUWAIT-

Non-oil activity in Kuwait expanded at a slightly slower pace in May, with the country now recording its ninth consecutive month above the 50.0 mark for healthy growth, according to S&P Global’s PMI (pdf). Kuwait’s headline reading fell to 53.9 in May, down from 54.2 in April — which had been a five-month high for the nation’s headline figure.

New orders were on the rise once again, albeit at a slower pace than in April, according to the report. New export orders also saw a marked expansion during the month, with competitive pricing also helping surveyed firms secure new orders in international markets. The rise in new orders coupled with a “desire to complete projects in a timely manner” led to increased staffing levels for the third consecutive month, which came in tandem with faster levels of job creation — the joint-fastest since the series began in September 2018.

Input costs rose for the second consecutive month, with the pace of inflation rising at its fastest rate since March 2024. In turn, companies raised their output prices at a stronger pace in May, with charges increasing at the sharpest rate in almost a year. “Companies are also facing cost pressures, meaning that they are having to increase their selling prices more quickly. So far, this has not been detrimental to demand, but this will also be important to watch out for as the year progresses,” S&P Global’s Andrew Harker said in the report.

The outlook continues to improve: “Business confidence ticked up to a 12-month high in May, with around 36% of respondents predicting a rise in output over the coming year. Positive sentiment reflected continued competitive pricing, marketing activity and improving demand,” the report reads.

QATAR-

Qatari non-oil private sector’s growth slightly increased from the previous month, with the improvements coming due to a rise in new work, according to Qatar Financial Center PMI (pdf). The nation’s headline figure came in at 50.8 in May, up from 50.7 in April, keeping Doha just slightly above the 50.0 threshold indicating growth — but well below the long-run survey average of 52.2.

Total business activity declined slightly in May, causing a build-up in outstanding orders for the sixth consecutive month. However, new business activity grew for the second month in a row in May, which reflected growth in the wholesale & retail and services sectors. Purchasing activity rose to its fastest rate in two years, once again aided by improvements to suppliers’ delivery times, which saw their quickest improvement since December 2022.

Employment increased at one of its strongest rates on record, extending the current run of job creation to ten consecutive months. Overall job creation rose at the third-highest on record, with workforces expanding in sectors that include manufacturing, wholesale & retail, and services, but only marginally in construction. This came with a sharp increase in wages, which rose once again but did so at their slowest pace since December.

Qatari businesses are growing more confident: “The 12-month outlook for the non-energy private sector remained positive in May, with confidence linked to strong demand across the real estate sector, generally improving market conditions, new business opportunities, industrial development and growth of the expat population. Sentiment strengthened since April and was broadly in line with the trend for 2025 so far, remaining stronger than a year earlier,” the report reads.

EGYPT-

Non-oil private sector activity declined at a slower pace in May, with fewer firms reporting cutbacks to customer sales, according to S&P Global’s latest Purchasing Managers Index (PMI) report (pdf). Egypt’s headline figure rose by 1 percentage point to 49.5 in May, up from 48.5 in April, marking the slowest pace of contraction in three months.

New orders and overall output continued to fall during the month — albeit at a slower pace. The new orders sub-index came in at 49.1, up from from 47.24 in April, Reuters reports. Output levels also continued to decline at a slower pace than the previous month, with the output sub-index rising to 49.5 from 47.4 in April. Firms that were surveyed attributed the continued decline in output levels to a decrease in order book volumes amid weaker customer demand.

Meanwhile, input costs rose at their highest pace in five months, with the acceleration driven by a rise in purchase prices for items that include fuel, cement, and paper. Firms also cited volatile exchange rates (particularly with the USD) as a factor for the rise in input costs. This reflected in output prices this time around, with selling prices increasing at their highest level in seven months.

Purchasing prices hike main headache for businesses…: “Companies were particularly hit by an increase in purchasing prices, leading them to pass on at least part of this increase to customers. Uncertainty in currency markets and concerns towards future global trade conditions amid US tariffs were noted as factors behind higher supplier prices,” S&P Global Senior Economist David Owen said.

… But businesses are growing slightly more hopeful: “When assessing the 12-month outlook, non-oil businesses in Egypt were slightly more upbeat compared to April, although the level of optimism remained weak by historical standards. Some firms indicated that stubborn price pressures and low demand had weighed on output expectations,” the report reads.

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