Riyadh - Mubasher: The headline seasonally adjusted Purchasing Managers’ Index (PMI) of Saudi Arabia fell to 57.4 in December 2025 from 58.5 in November, according to Riyad Bank’s latest data.
The index remained above its long-term average of 56.9, while signaling a slowdown in growth across the non-oil private sector for the second consecutive month.
The reading reflected continued expansion in business activity, new orders, and employment, although the rate of improvement moderated, marking the slowest growth in overall performance in the past four months.
Inflationary pressures intensified, resulting in higher output prices, while business confidence for the year ahead softened due to rising market competition
Although the pace of growth eased to the softened since August, non-oil firms reported a significant increase in output in December, supported by new business, ongoing projects, and elevated investment spending.
New orders also rose sharply, driven by successful marketing campaigns, client acquisitions, and new contract awards, yet the pace of expansion eased compared with the previous four months. Meanwhile, the export sales recorded only a marginal increase during the period.
Employment continued to expand robustly, sustaining strong workforce growth similar to November, while backlogs of work rose to their highest level since July.
Purchasing activity accelerated to its fastest pace in three months, leading to a sharper accumulation of input stocks, aided by improved supplier delivery times.
Input costs increased at a faster rate, contributing to higher selling prices, although wage pressures eased to a 20-month low.
Naif Al-Ghaith, Chief Economist at Riyad Bank, commented: “New orders stayed above the expansion threshold, signalling continued demand inflows. Export demand recorded a marginal increase for the fifth consecutive month, but the latest rise was the weakest in this sequence, suggesting that external demand remains supportive but uneven."
He added: “Looking ahead, business sentiment softened but remained positive. The Future Output Index stayed above the neutral mark, suggesting continued growth into 2026, though confidence is more cautious amid heightened competition.”
