(Reuters) – Strong demand drove growth in Saudi Arabia's non-oil business sector in December, albeit at a slightly slower pace than the previous month, a survey showed on Sunday.
Riyad Bank Saudi Arabia's seasonally adjusted Purchasing Managers' Index (PMI) fell to 58.4 in December from a 17-month high of 59.0 in November. Despite the decline, the headline PMI remained well above the 50.0 level that indicates growth.
New orders continued to rise, accelerating for the fifth month in a row, driven by strong domestic demand and increased exports. The sub-index rose to 65.5 in December from 63.4 the previous month, and the pace of growth was the fastest recorded in 2024.
“The non-oil private sector in the Kingdom of Saudi Arabia ended the year 2024 well, which reflects the successful steps achieved under Vision 2030,” said Nayef Al Ghaith, chief economist at Riyad Bank, referring to the country’s ambitious program to diversify its economy.
Cost pressures remained a concern, with input prices rising sharply due to strong demand for materials. However, wage inflation eased, helping to ease the overall cost burden.
Business expectations improved to a nine-month high in December, with businesses optimistic about continued growth in 2025.
Al-Ghaith added that non-oil GDP is expected to grow by more than 4% in 2024 and 2025, driven by the significant improvement in business conditions.
The Saudi government plans to increase strategic spending on mega projects to achieve Vision 2030 goals, especially items with tight deadlines. Last month, the Kingdom was officially announced as the host country for the 2034 FIFA World Cup.
