Saudi Non-Oil Private Sector Growth Eases

Riyad Bank Saudi Arabia’s PMI fell to 56.3 in July 2025, from a three-month high of 57.2 in the previous month. The deceleration was largely due to a slower pace of growth in both output and new business, with new order volumes expanding at its weakest rate in three and a half years. On the employment front, job creation picked up notably during the month, partly reflecting rising backlogs of work. In terms of pricing, input cost pressures remained elevated across the non-oil private sector, although the overall pace of inflation eased slightly compared to the second-quarter average. This came despite a sharp rise in wages, driven by efforts to retain staff and offer bonuses. Consequently, firms raised their selling prices for the second consecutive month. Lastly, business sentiment toward future activity declined noticeably from June’s two-year high. Although companies remain generally optimistic about output growth, overall confidence dropped to its lowest level since July 2024.