RIYADH: Saudi Arabia’s non-oil business activities strengthened in October, with the Kingdom’s purchasing managers’ index rising to a six-month high of 56.9, an economy tracker showed.
The Riyad Bank Saudi Arabia PMI survey, compiled by S&P Global, revealed that this figure beat the Kingdom’s September rating of 56.3 and the August level of 54.8.
The report revealed that this rise was driven by a sharper increase in sales, which supported further expansions in business activity, employment, purchasing activity, and stocks.
S&P Global highlighted that any PMI readings above 50 indicate growth, while levels below 50 signal contraction.
Strengthening the non-oil private sector is a crucial goal outlined in Saudi Arabia’s Vision 2030, as the Kingdom is steadily diversifying its economy by reducing its decades-long reliance on crude revenues.
Affirming the progress of Saudi Arabia’s economic diversification, a report released by GASTAT in October showed that the Kingdom’s non-oil activities expanded by 4.2 percent in the third quarter of this year, compared to the same period in 2023.
“In October 2024, Saudi Arabia’s non-oil private sector maintained its upward trajectory, with the PMI rising to 56.9 from 56.3, highlighting the nation’s robust economic health. This growth is part of a steady expansion trend since September 2020, driven by increasing demand and aligning with the goals of Vision 2030,” said Naif Al-Ghaith, chief economist at Riyad Bank.
He added: “The comprehensive sectoral gains reflect a strong business environment, supported by government initiatives and heightened private sector engagement, aligning with ongoing projects under Vision 2030 that aim to diversify the economy and reduce reliance on oil.”
S&P Global also attributed the rise in PMI to a stronger increase in sales volumes in October, as businesses commented on higher client demand and a general uplift in economic conditions.
Survey respondents cited various factors, including customer arrivals, successful marketing strategies, and increased infrastructure development, as some key elements driving non-oil business growth in the Kingdom.
“Over 40 percent of surveyed companies reported a surge in demand, spurred by robust domestic client interest, creative marketing strategies, and continuous infrastructure investments. These elements underscore Saudi Arabia’s economic resilience and high market confidence, further solidifying its position as a leading non-oil economy in the region,” said Al-Ghaith.
The report added that businesses that took part in the survey were optimistic about future growth, and it encouraged companies to increase their purchase activity in October.
Companies operating the Kingdom’s non-oil sector also raised their labor capacity in October, which enabled these firms to remain on top of workloads and curtail their levels of work-in-hand.
Even though the pace of job creation remained stronger than average, it eased for the second month in a row, partly due to a reduction in the number of staff in the construction sector.
“With this ongoing expansion, the non-oil sector’s contribution is projected to exceed 52 percent of the overall GDP and grow beyond 4 percent in 2024, reflecting the successful implementation of Vision 2030 and its associated projects,” concluded Al-Ghaith.
Source: www.arabnews.com