A survey conducted today, Wednesday, revealed that non-oil business activity in Saudi Arabia has significantly grown in December, with new orders increasing at the fastest rate in six months.
The purchasing managers’ index for Banque Saudi Fransi in Saudi Arabia registered at 57.5 in December, taking into account seasonal factors. This is the same reading as November, ending the year above the threshold of 50 indicating growth.
The secondary production index remained at a reading of 61, at strong levels similar to what it had recorded in December, while new orders increased as the secondary index advanced to 68.3, rising from 66.3 in November and reaching the highest reading since June due to improved demand.
The strongest increase was in the manufacturing sector.
Nayef Al-Ghaith, the chief economist at Bank Al Riyadh, stated that “this growth is supported by a significant increase in business activity and exports, highlighting the resilience and strength of the non-oil economy.
While companies continued to add jobs in December, the pace of employment growth slowed significantly compared to November and was sharply lower than its highest level in nine years recorded in October.
The latest government data shows that the unemployment rate among Saudi citizens has increased to 8.6% in the third quarter from 8.3% in the second quarter, but it still remains lower than the 9.9% recorded in the same period last year.
The Kingdom is heavily investing to diversify its economy away from oil and gas, develop the private sector, and create job opportunities for Saudis. It is expected that non-oil growth will significantly surpass overall growth in 2023, due to declining oil prices and production.
While participants in the survey anticipated that production activity would continue to grow by 2024, confidence levels dropped in December compared to the previous month. Construction companies were more optimistic about growth prospects than other sectors.
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