FX.co ★ Saudi Non-Oil Private Sector Growth Eases

In July 2025, Riyad Bank's Purchasing Managers' Index (PMI) for Saudi Arabia decreased to 56.3, down from June's three-month peak of 57.2. The slowdown can be attributed primarily to a reduced growth rate in both output and new business, with new order volumes experiencing the most sluggish expansion in three and a half years. On the employment side, there was a significant uptick in job creation, partly due to increasing backlogs of work. Regarding pricing, input cost pressures remained high within the non-oil private sector; however, the overall rate of inflation saw a slight decrease compared to the second-quarter average. This easing occurred despite a notable rise in wages, driven by attempts to retain employees and provide bonuses. As a result, companies increased their selling prices for the second month in a row. Furthermore, business sentiment regarding future activity saw a marked decline from June's two-year high, with overall confidence dropping to its lowest point since July 2024, even though firms generally remain optimistic about output growth.