Riyadh – Mubasher: Saudi Arabia’s headline seasonally adjusted Purchasing Managers’ Index (PMI) rose to 55.8 in May 2025 from 55.6 in April, signaling another solid improvement in the non-oil private sector, according to Riyad Bank’s latest data.
The reading was above the 50 mark, yet it remained much lower than the recent peak of 60.5 at the beginning of the year.
Non-oil private sector recorded a sustained uplift in operating conditions during May, with purchasing activity rising steeply.
In the latest survey, the new order volumes accelerated due to growing demands after softening to an eight-month low during April, the rate of growth in new order volumes
The growth rate was also attributed to strong sales performances, industrial development, and new marketing initiatives.
Business activity increased during May, with higher client demand boosting the output requirements.
Meanwhile, the construction sector witnessed the strongest rises in both activity and new business.
Input prices jumped last month, although the pace of inflation eased from April due to a slowing of wage pressures.
Panellists reported a hike in supplier charges for raw materials, with purchase price inflation increasing to its highest since February.
Nonetheless, selling prices were cut in May, driven by a sharp decrease in service sector charges.
Firms cited expansion plans and improved demand conditions, which resulted in a sharp surge in optimism during May, marking the greatest record in one and a half years.
Naif Al Ghaith, Chief Economist at Riyad Bank, said: “Firms reported improvements in demand, new project starts, and greater labour capacity as key drivers. This expansion, though slightly softer, reflects stable operating conditions and continued confidence across the private sector midway through the second quarter”
“New orders led the expansion this month, which saw a notable acceleration after dipping in April. The index returned to its long-run average, as firms cited strong sales, marketing efforts, and activity tied to industrial development,” Al Ghaith highlighted.
He revealed: “On the domestic front, firms increased hiring to match rising output needs, while purchasing activity saw its fastest growth since March 2024, supported by improved vendor delivery times and a more agile supply chain.
“Looking ahead, sentiment among non-oil firms has strengthened visibly. Business expectations looking forward reached their highest level since late 2023,” he concluded.
