Skip to content Skip to Search
Skip navigation

Demand fuels price rises in Saudi Arabia’s non-oil sector

Employment growth in Saudi Arabia's non-oil private sector eased further after hitting a nine-year record in October Shutterstock/diplomedia
Employment growth in Saudi Arabia's non-oil private sector eased further after hitting a nine-year record in October
  • New business and sales soar
  • Costs passed on to customers
  • Wages rise to retain talent

A surge in demand towards the end of the year saw non-oil companies in Saudi Arabia increase prices for the second month in a row in December.

Manufacturing was the standout industry.

“A number of firms signalled that increased demand momentum gave them greater confidence to pass on higher input costs to customers,” according to the Riyad Bank Saudi Arabia Purchasing Managers’ Index (PMI).

New business in the kingdom increased at the sharpest rate since June 2023.

Sales growth was at its quickest in nine years “as firms commented on new clients and strengthening demand conditions”.

The headline PMI registered 57.5 for the second consecutive month and has remained above 50.0 for more than three years. A figure below 50 indicates the sector is contracting.

The index incorporates five metrics: new orders, output, employment, suppliers’ delivery times and stocks of purchases.

Despite the increased confidence in business conditions, the rate of employment growth in the non-oil private sector eased further after hitting a nine-year record in October.

“The overall rise in employment was only modest,” the survey noted.

At the same time, however, Naif Al-Ghaith, chief economist at Riyad Bank, revealed that efforts to attract and retain talent had resulted in an “upward trend” for wages.

At the setting of the kingdom’s budget last month the finance ministry said it anticipated 4.4 percent real GDP growth this year, compared to 0.03 percent in 2023.

Inflation is expected to decline to 2.2 percent in 2024, compared to 2.6 percent last year.

Non-oil revenues in Saudi Arabia’s budget have increased at a compound average growth rate of 14 percent over the past 10 years and now account for 30 to 40 percent of total government revenues, according to Andrew Cunningham, a consultant on risk and governance in Middle East and sharia-compliant banking systems.

Latest articles

A data centre technician. Amazon, Google and Microsoft are also developing high-tech infrastructure in Southeast Asia

Damac to spend $3bn on data centres in Southeast Asia

Edgnex, the data centre subsidiary of Dubai’s Damac Group, is planning to invest $3 billion in sites across Southeast Asia over the next three to five years.  The investment is part of a $7 billion digital infrastructure strategy that aims to meet rising demand for artificial intelligence and cloud computing, Danish Nayar, Damac’s senior vice-president […]

City, Architecture, Building

Aldar acquires unfinished commercial tower in DIFC

Abu Dhabi’s largest developer, Aldar Properties, has acquired an unfinished commercial tower in the Dubai International Financial Centre (DIFC) for AED2.3 billion ($626 million), as it continues its expansion into its neighbouring emirate.  The tower, bought from H&H Development, has 40 floors of commercial and retail space and is due for completion in 2028.  It is […]

Britain's King Charles and Queen Camilla with the Emir of Qatar Sheikh Tamim bin Hamad Al Thani and Britain's Princess Anne, Princess Royal attend a State Banquet at Buckingham Palace, London, during the state visit to the UK of the Emir of Qatar, Britain, December 3, 2024.

Qatar to invest £1bn in UK climate tech

The Qatari and British governments have announced a spate of deals as the Gulf country’s emir arrived in the UK on a two-day state visit. Officials announced on Wednesday that Qatar will invest £1 billion ($1.27 billion) in climate technology in the UK, with British engineering firm Rolls-Royce a key beneficiary. The investment is expected […]

Muhammad Al Jasser of the Islamic Development Bank, second from left, at the United Nations Convention to Combat Desertification in Riyadh

Arab funds pledge $10bn to fight desertification

The Arab Coordination Group, an alliance of 10 development funds, is to provide $10 billion by 2030 to combat land degradation, desertification and drought, it was announced on the second day of the United Nations Convention to Combat Desertification event in Riyadh.  The commitment brings the total pledged to these interrelated causes at the two-week […]