(Riyadh, Saudi Arabia. Image from Pixabay)
May PMI hits 55.8, with strongest employment growth in over a decade amid rising business confidence
RIYADH, Saudi Arabia – Saudi Arabia’s non-oil private sector posted a robust performance in May 2025, with the Riyad Bank Purchasing Managers’ Index™ (PMI®) rising to 55.8, up slightly from 55.6 in April. This improvement reflects a solid business environment, driven by strong domestic demand, renewed hiring momentum, and accelerated growth in new orders.
Despite a slight easing in output growth—its softest since September 2024—firms remained optimistic. The uptick in the PMI, compiled by S&P Global, signals continued expansion, comfortably above the 50.0 threshold that separates growth from contraction.
New business volumes saw a sharp rebound, with firms attributing the increase to industrial development, marketing initiatives, and improved customer demand. Foreign demand also grew, although at a slower pace compared to previous months.
Employment surged during the month, marking one of the fastest rises in over a decade. Businesses cited rising output needs and stronger sales performance as key factors for the ramp-up in hiring, particularly in operations and sales roles.
Dr. Naif Al-Ghaith, Chief Economist at Riyad Bank, commented, “New orders led the expansion this month, which saw a notable acceleration after dipping in April. On the domestic front, firms increased hiring to match rising output needs, while purchasing activity saw its fastest growth since March 2024.”
Business sentiment was notably high, reaching its strongest level since late 2023. Firms expressed confidence in continued growth, supported by expansion plans and agile supply chain management. Construction emerged as a key driver, with the sector experiencing the most significant increase in both output and new orders.
Meanwhile, input costs rose sharply due to supplier charges and raw material inflation. However, competitive market dynamics prompted firms to reduce selling prices, particularly in the services sector.
Looking ahead, the non-oil private sector appears poised for continued momentum in the second half of the year, buoyed by resilient demand, strong hiring trends, and increasing business optimism.
Source: Riyad Bank / S&P Global PMI
