Saudi Arabia’s non-oil private sector demonstrated notable growth in May, marking the fastest expansion in three months as domestic demand improved and supply chains stabilised, in a signal of confidence in the Saudi economy despite the Iran war.
The seasonally adjusted Riyad Bank Saudi Arabia Purchasing Managers’ Index, compiled by S&P Global, increased to 52.8 in May from 51.5 in April, indicating sustained economic growth as the threshold for contraction is set at 50.
Recovery was strong after March’s downturn following the onset of the Iran war. Companies reported enhanced working conditions, reinstated contracts, and a rise in local demand as contributing factors.
Improvements in supply chains were evident, with suppliers’ delivery times shortening for the first time in three months as firms increasingly turned to local vendors. The backlog of work also continued to grow, marking its 11th month of increase, albeit at a moderate pace.
Analysts from Riyad Bank have expressed optimism regarding the non-oil sector’s trajectory, suggesting that the recent PMI data underpins expectations for sustained growth in Saudi Arabia’s non-oil economy throughout 2026.
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