Saudi non-oil business sector extends growth in March, ‎supported by an increase in new orders

A monthly survey showed that non-oil business activity in Saudi Arabia continued to grow at a strong rate in March, supported by an increase in new orders, but the pace of growth slowed compared to the previous month.

According to “Reuters”, the seasonally adjusted purchasing managers’ index for Saudi Riyad Bank recorded a reading of 58.7 in March, exceeding the fifty-fifty level that separates growth from contraction, but it fell from 59.8 in February, which is the highest reading in nearly eight years.

The new orders sub-index fell to 66.4 in March after rising to 68.7 in the previous month, but indicates continued strong demand, especially demand from foreign companies.

“Business conditions remain very positive at the end of the first quarter of 2023, as improved market conditions and increased development spending helped boost demand in the non-oil private sector,” said Nayef Al-Ghaith, chief economist at Riyad Bank.

As a result, the output sub-index also posted strong growth, though it eased to 64.2 in March from 65.6 in February.

Employment continued to record strong growth in March as companies increased staffing levels

Data last week showed a decline in the unemployment rate among citizens in Saudi Arabia to eight percent in the fourth quarter of 2022, down from 9.9 percent in the previous quarter.

Job creation is an essential part of the 2030 economic vision to reduce dependence on oil. In addition, the expansion of the non-oil private sector is one of the primary goals of the transformation strategy led by Crown Prince Mohammed bin Salman.

The latest survey showed that companies continued to indicate their confidence in the growth of business activity over the next year.