Riyadh - Mubasher: Saudi Arabia’s headline seasonally adjusted Purchasing Managers’ Index (PMI) edged down to 56.1 in February from 56.3 in January 2026, according to data released by Riyad Bank’s latest data.
This reading marks the softest improvement in non-oil business conditions for nine months. Businesses continued to see elevated demand and a robust rise in output, which strengthened the labour market and led to the sharpest increase in wage costs in the survey's history.
Although the output growth eased to a six-month low, it remained substantial in February.
Companies frequently cited improved customer demand and new project approvals, while some noted that competitive market pressures weighed slightly on overall momentum.
New orders grew on rising domestic sales, boosted by government initiatives, stronger consumer spending, marketing efforts, digital development, and client collaborations. Meanwhile, the international sales increased for the seventh consecutive month, though at a softer pace.
Rising workloads prompted firms to accelerate hiring, with employment growth reaching a four-month high and ranking among the strongest recorded in the survey’s history.
Higher staffing levels and efforts to retain employees led to the sharpest increase in wage costs since the survey began in August 2009. Surveyed firms highlighted notable salary adjustments, particularly for technical and sales roles.
While purchase price inflation eased slightly due to lower fuel costs and successful vendor negotiations, businesses continued to face higher supplier charges and rising metals prices. It is also worth noting that accelerating wage expenses pushed the overall input costs higher.
Hence, the companies raised selling prices at the joint-fastest pace since May 2023, matching the level recorded last October.
Meanwhile, the supplier delivery times improved to the greatest extent in nine months, reflecting operational efficiencies and better supply chain coordination.
Looking ahead, business expectations for the next 12 months remained positive, with firms anticipating output growth driven by new projects, stronger demand, and improving domestic economic conditions.
Naif Al Ghaith, Chief Economist at Riyad Bank, stated: “Saudi Arabia’s non-oil private sector sustained its expansionary trajectory with a PMI reading of 56.1 in February, though the pace of output growth eased to its lowest level since last August.”
“A key highlight of the February results was the sizable increase in employment, as firms expanded their workforce to manage higher workloads and new business inflows,” Al Ghaith noted.
He added: “While growth has moderated, demand and hiring activity continue to anchor the expansion, leaving the private sector well positioned to navigate evolving economic dynamics throughout the year.”
