Skip to content Skip to Search
Skip navigation

Saudi non-oil export orders rise at fastest pace for a year

Saudi exports Mawani
The Saudi Ports Authority shipping lane has been very busy between the kingdom and Asian countries
  • PMI survey shows sharp improvement in operating conditions
  • Private sector exports include chemicals and plastics 
  • Conditions expected to remain robust over the next 12 months

New export orders for Saudi Arabia’s non-oil sector in October increased at their fastest rate for nearly a year, the Riyad Bank Saudi Arabia Purchasing Managers’ Index (PMI) survey revealed on Wednesday. 

This demand helped the PMI, which gauges business confidence, to climb 0.6 percentage points to 57.2 in October. 

A reading above 50.0 shows an economy is growing and October’s figure – the second highest reading over the past 12 months – indicates “a sharp improvement in operating conditions” across the kingdom’s non-oil sector, the report states. 

“The strong business performance was spread widely across the non-oil economy.

“Output expansions were seen in the manufacturing, construction, wholesale and retail and services categories, with the strongest upturn registered among goods producers,” it added.

Rising demand from foreign markets led October to be the first acceleration in exports growth since July. 

The PMI survey follows central bank data showing a sustained increase in Saudi private sector exports financed through commercial banks. These are poised to hit their highest total since at least 2017.

Opened credits in the first nine months of 2022 amounted to SAR 72.428 billion ($19.314 billion), according to AGBI calculations based on central bank data. That compares with SAR 90.643 billion riyals for the full-year 2021. 

On a quarterly basis, export credits are also increasing – to SAR 29.766 billion in the third quarter from SAR 16.284 billion in the preceding three months. 

Of the third quarter total, 34.9 percent of the credits were to ship goods to the rest of the GCC, 12.3 percent were to non-GCC Arab countries, 5.6 were to North America, 3.1 percent were to Europe and 44 percent were to other countries including those in south, central and east Asia.

“(Non-oil) exports are performing very well,” David Owen, an economist at S&P Global, told AGBI. 

“We’re still seeing fairly strong demand. It has been improving quite a bit over the past year or so, after the pandemic, and (is) still enjoying that resilient recovery.”

Almost all Saudi’s private sector exports financed through private banks, which excludes hydrocarbons by state-run Saudi Aramco, are chemicals and plastics and other industrial products. 

Chemicals and plastics (exports financed through private banks) totalled SAR 10.7 billion in the third quarter – up from SAR 6.0 billion in the preceding three months – while those for other industrial products amounted to SAR 19.0 billion. That compares with SAR 10.4bn in the second quarter. 

The PMI survey found that firms believe operating conditions will remain “robust” over the next 12 months, with output expectations hitting their highest level since January 2021.

Respondents cited hopes of higher sales and sustained economic growth for their bullish outlook. 

Companies also reported the smallest increase in input costs since February as inflationary pressures eased.

Latest articles

More than 24 million people visited the World Expo event at Expo City Dubai between October 2021 and March 2022

Construction begins at Expo City Dubai site

Construction has begun on the first residential properties at Expo City Dubai, part of a mixed-use master plan to repurpose the legacy site after the world fair came to a close two years ago. Master developer Expo City Dubai announced last week that it has awarded four key contracts for its Mangrove Residences. UAE-based USF […]

Saudi housing costs rose nearly 9% year on year in May

Saudi housing costs rise but inflation remains steady

Housing costs in Saudi Arabia rose nearly 9 percent year on year in May, but it was not enough to push overall inflation in the kingdom over 2 percent. The latest data from the General Authority for Statistics showed the annual inflation rate in Saudi Arabia was 1.6 percent in May, having remained at this […]

OTB Group has a presence in Dubai with its Maison Margiela store in the Dubai Mall

Chalhoub Group in venture with Italian luxury brand

Luxury distributor Chalhoub Group has entered into a joint venture with Italian fashion conglomerate OTB Group to expand the brand’s footprint in the Gulf. OTB (which stands for Only The Brave) owns the Diesel, Jil Sander, Maison Margiela, Marni and Viktor&Rolf brands, the Staff International and Brave Kid companies, and holds a stake in the […]

Arid conditions brought about by the drought in Morocco are affecting the cost of sheep

Drought pushes up sheep price for Eid in Morocco

The price for a sheep in Morocco for the annual sacrifice at Eid al-Adha has increased on average at 10 times the 2.2 percent rate of inflation. A medium-sized female sheep costs MAD4000 ($400) as opposed to MAD3000 last year. This puts it out of range for many families in the country where a high […]