Riyadh - Mubasher: Saudi Arabia’s headline seasonally adjusted Purchasing Managers’ Index (PMI) retreated from 57.4 last December to 56.3 in January 2026, according to Riyad Bank’s latest data.

Non-oil private sector witnessed improved business conditions at the beginning of the year, driven by rising market demand, increasing employment numbers and enhanced purchasing activity.

Rising demands results in expansion in business activity. However, cost pressures accelerated amid increasing purchase prices and greater wage.

Some companies indicated that foreign competition hindered efforts to gain clients abroad, others reported a pickup in international demand, especially from GCC and Asian countries.

Naif Al Ghaith, Chief Economist at Riyad Bank, commented: “Survey evidence points to ongoing strength in output and sales, underpinned by newly approved projects, steady customer enquiries, and improved investor activity, even as growth momentum moderated.”

“Cost pressures increased in January, with input prices, purchase prices, and staff costs all rising at faster rates. Firms continued to raise output prices, although competitive conditions limited full cost pass-through,” he added.

Al Ghaith elaborated: “These dynamics are consistent with firming but contained inflationary pressures in Saudi economy. Overall, the survey points to a resilient non-oil sector entering 2026 with solid demand fundamentals, improving supply conditions, and cautious optimism despite firmer cost dynamics.”