Saudi Non-Oil Sector Grows as New Businesses Rise

Saudi Arabia's non-oil private sector continued to expand through 2024 and into 2025, with strong growth in retail, hospitality, and construction reflecting the wider push to diversify the economy.

Non-oil real GDP grew by about 4.5% in 2024, with those three sectors among the fastest-growing. Non-oil activities now account for roughly 51 to 55% of total real GDP by 2024 to 2025, a sign of how central they have become to national output.

Wholesale and retail trade, restaurants, and hotels together contributed around 10 to 10.3% of total GDP, while construction and real estate made up about 24% of non-oil GDP in the third quarter of 2024. Private non-oil investment rose about 6.3% year on year in 2024, backed by active project pipelines in construction and hospitality.

Business surveys point to continued momentum. The Purchasing Managers' Index remained firmly in growth territory in the mid-50s into 2025 and 2026, supported by strong new orders and steady private consumption.

Why it matters

For residents and expats in Riyadh and Jeddah, this growth translates into more shops, restaurants, hotels, and construction jobs. Thousands of new hotel rooms are expected in Riyadh by the end of 2026, expanding options for visitors and creating new employment across the sector. The expansion of everyday sectors also signals a broader base of economic activity beyond oil, in line with the Kingdom's long-term diversification goals.

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