The Saudi private sector closed 2024 with the best showing in 10 years – and will be looking more of the same in 2025.
The performance came partially from the ‘fastest increase in total new orders since June 2011’, which in turn led to ‘rapid expansion in activity and stocks’.
Stock levels maintained by non-oil businesses also rose at the second-fastest pace since the start of the monthly PMI (Purchasing Managers Index) score tracking.
“Nearly 45% of firms observed higher sales volumes, attributing this growth to positive economic conditions and the acceleration of infrastructure projects,” said Naif Al-Ghaith, Chief Economist at Riyad Bank.
“The rise in export orders further complemented domestic demand, particularly from GCC countries, reflecting effective marketing and competitive pricing strategies.”
Going forward, a lot of the business sentiments and new order intake will also depend on how well oil prices are faring. The commodity started the week on a positive trajectory, helped by the US tariff battles ringing in the background.
What can Saudi businesses expect in 2025?
Businesses expect ‘sustained demand growth and supportive market conditions’, said Al-Ghaith.
“Employment trends underline this positive sentiment, as companies continued to expand their workforce to meet growing demand.
“Supply chain improvements, combined with higher purchasing activity, have bolstered operational efficiency and prepared businesses for sustained growth.”
Exports help
The other area where Saudi businesses made gains were on export-led sales. “The latest data showed the fastest growth in foreign demand for 18 months in January,” says the Riyad Bank report.
“In some cases, firms mentioned that greater marketing, competitive prices, and better relations with international customers had driven up sales.”
How did Saudi PIM fare in January?
The Saudi PMI for January was at an exceptionally strong 60.5, from 58.4 in December. This is also the highest since September 2014. (The PMI reading is based on monthly tracking of how businesses are doing on orders, costs, hiring, stock levels, etc.)
“This strong performance (in January PMI) underscores the resilience of the non-oil private sector, fueled by surging new orders and a significant rise in business output,” said Al-Ghaith.
“The ‘output index’, reaching its highest level in 18 months, underscores strong demand conditions, with nearly 30% of firms reporting higher activity levels.
“This expansion highlights the country’s continued economic diversification efforts.”
