January 5, 2025 - Saudi Arabia's non-oil business sector experienced growth in December, driven by robust demand, although at a slightly reduced pace compared to the previous month. The Riyad Bank Saudi Arabia Purchasing Managers' Index (PMI) registered at 58.4, down from a 17-month high of 59.0 in November, but still well above the 50.0 threshold indicating expansion.
New orders continued to increase, marking the fifth consecutive month of growth, fueled by strong domestic demand and a rise in exports. The subindex for new orders surged to 65.5 in December from 63.4 the prior month, reflecting the fastest growth rate recorded in 2024.
Naif Al-Ghaith, Chief Economist at Riyad Bank, noted that the non-oil private sector concluded 2024 positively, attributing this to advancements made under the Vision 2030 initiative aimed at diversifying the economy. Despite concerns over cost pressures, with input prices increasing due to heightened material demand, wage inflation showed signs of easing, alleviating some cost burdens.
Business expectations improved, reaching a nine-month high in December, as companies expressed optimism about ongoing growth into 2025. Projections indicate that the non-oil GDP could grow by over 4% in both 2024 and 2025, supported by significant enhancements in business conditions. Additionally, the Saudi government plans to increase strategic spending on major projects to align with its Vision 2030 objectives, particularly those with imminent deadlines. Recently, Saudi Arabia was confirmed as the host nation for the 2034 FIFA World Cup.