RIYADH — There has been a moderation in the growth of the Kingdom’s non-oil private sector, marking the weakest improvement in nine months amid mounting wage pressures, according to the data of latest indexes released on Tuesday. This slow in growth recorded despite sustained demand and rising output across companies.
According to the report, overall business conditions remained robust, with the headline index comfortably above the neutral 50.0 threshold. Sub-indices tracking output and new orders continued to signal a favorable operating environment.
The survey highlighted that non-oil business activity recorded its softest expansion in nine months. Nonetheless, both demand and output maintained solid growth, further strengthening the labor market and driving the sharpest increase in wage costs since the survey began.
While growth in non-oil output eased to a six-month low, it remained substantial in February. Survey respondents frequently cited improved customer demand and a rise in approvals for new projects. However, some participants pointed to competitive pressures across various markets as a factor weighing on growth.
The data also showed that order volumes increased in February, with companies largely attributing the expansion to stronger domestic sales. Respondents noted that supportive government policies, improved customer spending, intensified sales and marketing initiatives, digital business development, and collaborative projects with clients all contributed to higher new business volumes. Firms also reported a surge in international orders, despite the moderate pace of growth.
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