A survey released on Sunday showed that non-oil business activity growth in Saudi Arabia accelerated for the second consecutive month in October, as new orders supported overall activity growth, leading to a significant increase in employment levels. The Riyad Bank Purchasing Managers' Index (PMI) for the Kingdom rose to 58.4 in October from 57.2 in September, well above the 50 level that indicates growth and the highest reading since June.
New business grew at a faster pace, with the new orders sub-index climbing to 66.1 in October, the highest level in four months, up from 64.2 in the previous month. The survey indicated growth in output and new business across most sectors, including manufacturing and construction. Although output growth remained high, the sub-index fell to 60.1, weaker than the long-term trend.
Naif Al-Ghaith, chief economist at Riyad Bank, stated, "The increase in new orders indicates market expansion and suggests that the non-oil sector is experiencing sustainable growth and demand for its products." He added that "employment growth is a positive sign for the Saudi economy, as it indicates increasing demand for labor and a potential improvement in the labor market."
The employment sub-index rose to its highest level in nine years at 54.5 in October, up from 52.0 in September. Creating job opportunities for citizens in the expanded private sector is a government priority as it implements a wide-ranging economic diversification plan known as Vision 2030, led by Crown Prince Mohammed bin Salman.
The Saudi government expects non-oil economic sector growth of around six percent in 2023, significantly exceeding overall GDP growth. While the confidence level in future production decreased compared to the previous month, companies remained generally optimistic.
