Saudi Arabia Business Confidence Remains Strong at 56.6 in September

Saudi Arabia’s business confidence remained firmly in positive territory in September, with the Business Confidence Index (BCI) easing slightly to 56.6 from 56.7 in August, according to official data from the General Authority for Statistics (GASTAT).

The index remained above the neutral threshold of 50 points, indicating continued optimism among businesses despite regional uncertainty and supply-chain pressures linked to the US-Iran conflict.

The BCI fell to 52.1 in March before recovering to 54.5 in April and 55.6 in May. It reached 56.6 in June, slipped to 56.5 in July and climbed to 56.7 in August.

GASTAT said the index reflected confidence in the stability of economic activity and expectations of continued growth across different sectors.

The positive sentiment was also reflected in private-sector performance. Riyad Bank’s Purchasing Managers’ Index, compiled by S&P Global, rose to 55.3 in September from 53.8 in August, indicating the strongest improvement in Saudi Arabia’s non-oil private-sector business conditions since February.

Thomas Kuruvilla, managing partner of Arthur D. Little Middle East and India, said confidence was increasingly supported by greater visibility over future demand rather than short-term economic conditions.

He noted that the BCI had recovered from 52.1 in March to 56.6 in September and remained above 56 since June, despite regional volatility and supply-chain difficulties.

Kuruvilla attributed the resilience to investment and sector development across the kingdom, which he said was giving businesses greater confidence to plan beyond immediate economic conditions.

He added that companies should turn this confidence into sustainable private-sector growth by investing selectively in skills, talent and local supply chains while maintaining discipline over capital spending and returns.

Industrial confidence improves

The industrial sector recorded an improvement in September, with its confidence index rising 0.5 points to 56.3 from 55.8 in August. GASTAT attributed the increase to stronger confidence in overall business performance and expected sales for the following month.

Services remained in positive territory, although the sector’s index fell 0.7 points to 55.4 from 56.1. The decline was linked to weaker confidence regarding current and expected input costs.

Construction confidence also remained optimistic, with the index easing 0.2 points to 57.1 from 57.3 in August.

Separate data from the Al Rajhi Capital Saudi Construction Index showed that construction activity expanded for a fifth consecutive month in September. However, the headline index declined to 54.4 from 55.4 in August.

Kuruvilla said the construction sector’s future performance would increasingly depend on execution quality rather than simply the number of projects underway. He highlighted commercial viability, careful project scheduling, local supply chains, productivity and delivery capacity as important factors in creating a sustainable market.

He said well-capitalised companies with strong operational capabilities could use the current environment to plan capacity, invest selectively and prioritise projects with clearer delivery prospects and stronger long-term economic value.

The BCI measures business sentiment by surveying establishments across non-oil economic activities classified under the International Standard Industrial Classification of All Economic Activities. Its results provide an indication of businesses’ assessment of current conditions and expectations for the months ahead.