RIYADH — Growth in Saudi Arabia’s non-oil private sector is slowing, with the weakest improvement in nine months amid rising wage pressures, according to the latest indicator data released on Tuesday. This slowdown in growth was recorded despite sustained demand and increased production across companies.
According to the report, the overall economic situation remained strong, with the composite index comfortably above the neutral standard of 50.0. Sub-indexes that track production and new orders continue to show a positive operating environment.
The survey highlighted that non-oil business activity recorded the slowest expansion in the past nine months. Nevertheless, both demand and production maintained strong growth, further strengthening the labor market and causing the sharpest increase in wage costs since the beginning of the survey.
Although non-oil production growth slowed to its lowest level in six months, it continued to show strong growth in February. Survey respondents frequently mentioned improved customer demand and increased approvals of new projects. However, some participants pointed to competitive pressures across various markets as a factor constraining growth.
The data also showed that order volumes increased in February, with the company mainly blaming the expansion on strong domestic sales. Respondents noted that government support policies, improved customer spending, increased sales and marketing efforts, digital business development, and joint projects with customers all contributed to the increase in new business volumes. Companies also reported a surge in orders from overseas, despite the slow pace of growth.
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