Survey Shows Recovery of Non-Oil Business Activity in Saudi Arabia

A survey released today, Tuesday, revealed that non-oil business activity in Saudi Arabia improved in February, supported by the fastest growth in production in five months. The seasonally adjusted Purchasing Managers' Index (PMI) for Riyad Bank rose to 57.2 points in February, up from 55.4 points in January, which was the lowest reading in two years. The sub-index for production increased to 61.5 points, marking the fastest growth rate since September, indicating greater momentum in demand. New order activity also rebounded, supported by a return to growth in export orders. The new orders sub-index rose to 62.2 points last month from 60.5 points in January, remaining in the expansion zone, although the increase was slower than in recent months. Naif Al-Ghaith, chief economist at Riyad Bank, stated that growth was driven by the services and construction sectors. He added, "Moreover, the significant rise in new export orders indicates increasing demand for domestic products from international markets and the high competitiveness of local industries." The Saudi finance minister mentioned that non-oil growth in the kingdom is expected to exceed five percent in the medium term, slightly lower than the previously expected rate of six percent. Non-oil activities significantly outperformed the oil sector last year, which saw a sharp slowdown due to oil production cuts and declining prices.