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The Riyad Bank Saudi Arabia Purchasing Managers’ Index rose to 51.5 in April from 48.8 the previous month, crossing above the neutral 50 mark to signal expansion in the non-oil private sector. This rebound followed a sharp contraction in March linked to regional conflict disruptions that had delayed client decisions and strained supply chains. Domestic demand and progress on infrastructure projects drove the recovery even as overall growth remained modest.
New business volumes improved in April after a decline in March although the pace of increase stayed relatively mild with some clients postponing spending amid Middle East tensions. Output expanded with firms reporting higher production levels supported by domestic sales. New export orders meanwhile contracted at the fastest rate in the survey history according to the Riyad Bank assessment.
Input costs surged at the fastest pace on record in April as regional instabilities elevated raw material and freight prices. Selling prices rose at the second-fastest rate since the survey began behind only August 2009 as companies passed on higher burdens despite competitive pressures that prompted some discounting. These cost increases occurred alongside the return to growth in activity and orders.
Business confidence improved from March levels with firms citing longer-term expansion plans and domestic infrastructure development as reasons for optimism. The Future Output Index pointed to expectations of stronger activity over the coming 12 months. Companies remained upbeat about the trajectory despite ongoing headwinds from geopolitical factors.
Naif Al-Ghaith, chief economist at Riyad Bank, said, “The improvement in the PMI reflects a recovery in business activity and new orders, both of which moved back into growth territory. Firms reported higher output levels, supported by an increase in domestic demand and continued progress on existing projects. This suggests that internal economic momentum driven by government spending, infrastructure development and private sector participation continues to act as a key stabilizing force for the economy.” Al-Ghaith added that strength in local demand had offset export weakness in line with strategic goals to build a self-sustaining model.
World Bank projections place non-oil sector expansion at 4.3 percent for 2026 as diversification advances. The IMF revised its forecast for overall Saudi economic growth in 2026 to 4.5 percent citing resilient domestic demand and ongoing reforms. S&P Global data showed the PMI advancing further to 52.8 in May continuing the upward trend from the April rebound.
