Saudi Business Confidence Holds Firm as Non-Oil Sectors Maintain Momentum

“Saudi Arabia’s Business Confidence Index held at 61.6 points in January, reflecting sustained optimism across the Kingdom’s non-oil sectors, official data showed.”

Figures released by the General Authority for Statistics (GASTAT) indicated that while the index edged down slightly from 62 points in December, it remained comfortably above the neutral 50 mark that separates expansion from contraction. The modest 0.6% month-on-month decline did little to dent overall sentiment, pointing to continued confidence among businesses operating outside the oil sector.

GASTAT said the data reflects ongoing stability in economic activity and steady growth across a range of industries. The strength of business sentiment is widely seen as evidence of progress under Saudi Arabia’s Vision 2030 programme, which aims to diversify the economy and reduce its dependence on oil revenues through investment, private sector development and job creation.

“The index continues to reflect prevailing optimism in the business sector, supported by establishments’ confidence in the stability of economic activity and the continued growth across various sectors,” GASTAT said in its report.

Sector-level data showed broadly consistent confidence trends. The industrial sector posted a Business Confidence Index reading of 61.7 points in January, remaining in optimistic territory despite a 0.8% decline from the previous month. GASTAT attributed the easing largely to softer sentiment around current input costs and expectations for the coming month.

In the services sector, the index stood at 61.3 points, down 1.2% from December. The decline was linked to a limited reduction in confidence regarding present input costs and anticipated costs in the near term. Despite the drop, services firms continued to signal expansion, supported by demand across retail, hospitality and professional services.

The construction sector also maintained a positive outlook, with its index registering 61.6 points in January, a marginal decrease of 0.3% from December. GASTAT said the slight movement reflected concerns related to input costs, while overall confidence in activity levels remained intact.

Separate indicators continue to support the positive picture for the non-oil economy. Earlier this month, the Riyad Bank Purchasing Managers’ Index, compiled by S&P Global, showed PMI at 56.3 in January. The reading was driven by output growth, improved market conditions and stronger demand among non-oil businesses.

Looking ahead, international forecasts remain upbeat. In a January report, Standard Chartered projected Saudi Arabia’s economy would expand by 4.5% in 2026, supported by sustained momentum in both hydrocarbon and non-oil sectors. The bank expects non-oil growth to continue at a similar pace, underpinned by investment and consumer spending.

Together, the indicators suggest that Saudi Arabia’s diversification efforts are continuing to bolster confidence across key areas of the economy.