(Reuters) -Saudi Arabia's non-oil private sector expanded robustly in July, albeit at a slower pace than the previous month, as job creation surged in response to strong domestic demand, the Riyad Bank Purchasing Managers Index report showed on Tuesday.
The headline PMI reading fell to 56.3 in July from 57.2 in June, remaining well above the 50.0 threshold that indicates growth in activity.
“Saudi Arabia’s non-oil economy remained on a solid growth track in July, supported by higher output, new business,
and continued job creation," said Naif Al-Ghaith, Chief Economist at Riyad Bank.
Firms recruited staff to manage higher workloads and new orders. The survey noted another historically steep rise in employment, following June's record growth in job numbers over the past 14 years.
Output growth eased to its lowest rate since January 2022, as firms reported challenges such as higher competition and lower customer footfall. Additionally, new export orders fell for the first time in nine months, highlighting difficulties in gaining foreign clients.
Cost pressures softened slightly, with input price inflation slowing from the second-quarter average. However, labour costs continued to rise steeply as companies offered bonuses to retain workers.
Despite the slowdown, businesses remain optimistic about future activity, supported by resilient market conditions and strong client demand. However, overall optimism was the lowest recorded since July 2024.
(Reporting by Reuters)
