PMI: Saudi Non-oil Expansion Cools in December 2025 as Competition Heats Up

01:56 AM EST, 01/05/2026 (MT Newswires) -- Robust growth in Saudi Arabia's non-oil private sector softened for a second straight month in December 2025 as market saturation concerns the impact of improving economic conditions and solid domestic demand, Riyad Bank and S&P Global said Monday. The Riyad Bank Saudi Arabia PMI decreased to 57.4 from 58.5 in November 2025, reflecting the slowest rate of expansion in business activity in four months, though the index remained well above its long-run average of 56.9. Non-oil companies continued to benefit from a sharp rise in new orders and output, supported by client acquisitions, new contracts, marketing efforts, and higher investment spending, even as the pace of growth was the softest since August 2025. New export orders grew marginally compared to the previous month. "New orders stayed above the expansion threshold, signalling continued demand inflows," said Riyad Bank Chief Economist Naif Al-Ghaith. "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. Overall, demand conditions point to resilience rather than acceleration as firms navigate a more competitive environment." Firms increased their staff at a strong rate, which was similar to November's, as backlog accumulation hit a five-month high. Meanwhile, purchasing activity climbed the most in three months, surpassing the series growth trend. On the price front, input inflation accelerated due to a faster rise in purchase costs, even as wage pressures declined to a 20-month low. Businesses shifted the cost burden to customers, triggering a strong increase in output prices. Looking ahead, increasing market competition weakened business optimism to the lowest since July 2025, dragging morale below the series' long-run average.