Saudi Arabia’s Non-Oil Economy Maintains Momentum as PMI Signals Continued Expansion
RIYADH — Saudi Arabia’s non-oil private sector continued to show strong expansion at the start of 2026, underscoring the resilience of the Kingdom’s economic diversification drive, according to the latest Purchasing Managers’ Index data released by S&P Global.
The Riyad Bank PMI, compiled by S&P Global, registered 56.3 in January, easing slightly from 57.4 in December but remaining well above the 50-point mark that separates growth from contraction. The reading signals sustained improvement in business conditions across Saudi Arabia’s non-oil economy.
The latest data reinforces progress under Saudi Vision 2030, which aims to reduce dependence on hydrocarbons by accelerating growth in sectors such as tourism, manufacturing, logistics, and financial services.
Naif Al-Ghaith, chief economist at Riyad Bank, said the sector’s performance reflects strong domestic demand and steady business activity.
“The non-oil private sector in Saudi Arabia continued to grow at the beginning of 2026, supported by solid domestic demand and stable business conditions,” Al-Ghaith said. He added that output and sales remain robust, driven by new project approvals, consistent customer inquiries, and increasing investor activity, even as the pace of growth moderated slightly.
Supporting the PMI findings, the General Authority for Statistics recently reported that Saudi Arabia’s real gross domestic product expanded by 4.5 percent between 2020 and 2025, reflecting significant gains across both oil and non-oil sectors.
GASTAT data also showed that non-oil activities grew by 4.9 percent year on year in 2025, highlighting the growing contribution of diversified industries to overall economic performance.
According to the PMI report, business conditions in the Kingdom’s non-oil private sector improved in January due to rising demand for goods and services, higher employment levels, and increased spending. Companies reported confidence in near-term prospects as investment activity remained elevated and pipeline projects continued to support output.
The sustained strength of the PMI reading suggests that Saudi Arabia’s diversification efforts are translating into tangible economic momentum, positioning the Kingdom for more balanced and sustainable growth in the years ahead.