Riyadh - Mubasher: Saudi Arabia’s headline seasonally adjusted Purchasing Managers’ Index (PMI) rose to 52.8 in May 2026 from 51.5 in April, reflecting a stronger improvement in business conditions.
However, the PMI reading is weaker than its long-run average of 56.8, as some survey responses suggested that ongoing regional geopolitical tensions had restrained growth.
The non-oil private sector strengthened in May, as the latest PMI showed output increasing sharply as domestic demand improved and supply chains stabilized.
Nevertheless, new order growth remained modest amid another steep contraction in exports, while business optimism was subdued.
The higher input costs kept output prices rising sharply, although overall inflationary pressures eased slightly from April.
Firms also boosted their quantity of purchases for the first time since February, reflecting both improved expectations for future orders and a desire to secure inputs amid lingering logistical uncertainties.
As for the employment, it returned to growth during May, offsetting the first decline in staffing levels in two years in the previous survey period. It was attributed to the need to limit pressure on business capacity, as backlogs of work rose for the eleventh month running
Naif Al Ghaith, chief economist at Riyad Bank, commented: “The improvement was mainly driven by stronger output and new orders, supported by improving domestic demand and the restart of previously delayed projects. Firms reported better business conditions during May, with output growth reaching its strongest level in three months.”
“The latest PMI results reinforce the view that Saudi Arabia’s non-oil economy continues to benefit from Vision 2030 initiatives, government spending, infrastructure projects, tourism expansion, and increasing private sector participation across multiple industries,” Al Ghaith noted.
He elaborated: “Inflation conditions also remain supportive for economic growth. Saudi Arabia’s annual inflation rate stood at only 1.70% in April 2026, remaining among the lowest globally and significantly below inflation levels seen in many advanced and emerging economies.”
