Saudi Arabia’s Non-Oil Sector Shows Continued Strength as PMI Hits 58.1 in March

Saudi Arabia’s non-oil private sector remained robust in March, with the country’s Purchasing Managers’ Index (PMI) hitting 58.1, maintaining the highest rating among Middle Eastern economies. The reading, compiled by S&P Global and reported in Riyad Bank’s latest update, underscores the Kingdom’s progress in economic diversification under Vision 2030.

Although slightly down from February’s 58.4, the March figure signals solid expansion, well above the neutral 50-point mark. It also outpaced the PMI scores of the UAE (54), Kuwait (52.3), and Qatar (52), confirming the Kingdom’s leading non-oil sector performance in the region.

The latest report highlights a continued rise in new order volumes, albeit at a softer pace than the near-record surge observed in January. Strong domestic demand, effective marketing strategies, and improved economic conditions contributed to the sector’s momentum, with foreign demand also increasing, though at a slower rate.

“The Saudi non-oil private sector is demonstrating significant resilience and growth,” said Naif Al-Ghaith, Chief Economist at Riyad Bank. “This reading reflects sustained positive momentum in business conditions, highlighting the sector’s robust economic health and its vital role in the ongoing diversification efforts of the Kingdom.”

Employment in the sector also saw notable gains. Staffing levels remained elevated as companies expanded sales teams to meet growing demand. The first quarter of 2025 recorded the fastest job growth in the non-oil sector since Q3 2012, with the trend supporting the government’s goal of reducing national unemployment to 7%.

Non-oil businesses increased purchasing activity in March, leading to substantial stockpiling in anticipation of continued sales growth. The report indicated that supply chain efficiencies improved, with quicker delivery times from vendors, though some firms still faced minor administrative delays, contributing to a rise in backlogged orders.

The PMI report also noted a significant easing in cost pressures. Input cost inflation dropped to its lowest point in over four years, enabling companies to reduce selling prices for the first time in six months. Analysts see this as a positive sign for consumers and a supportive factor for continued economic expansion.

Al-Ghaith emphasized the broader implications of the report: “The improvement in business conditions supports efforts to attract investment, increase competitiveness, and enhance local business growth. It’s also a testament to the Kingdom’s commitment to fostering a dynamic private sector.”

With non-oil activities now accounting for 52% of Saudi Arabia’s GDP — a 20% increase since the launch of Vision 2030 — the government remains focused on attracting $100 billion annually in foreign direct investment by 2030. Infrastructure investments and regulatory reforms are expected to further bolster the private sector’s role in driving long-term sustainable growth.