Saudi Non-Oil Sector Hits Six-Month High in August

Saudi Arabia's non-oil private sector expanded at its fastest pace in six months during August 2026, with the Purchasing Managers' Index (PMI) reaching 53.8, signaling continued resilience in the wider economy.

The stronger reading came even as real gross domestic product contracted 4.8% year on year in the second quarter of 2026, a decline driven mainly by a 24.7% drop in oil activities during the period.

Despite that contraction, non-oil activities still grew 0.6% year on year in the second quarter, underlining the role of domestic demand and improving business activity in keeping the broader economy on a steady footing.

Why it matters

For residents and business owners across Riyadh, Jeddah and other cities, the pickup in non-oil activity points to sustained demand across sectors that touch daily life, from retail and services to construction and hospitality. A PMI reading above 50 indicates expansion, and the six-month high suggests firms are seeing healthier order books and business conditions.

The figures also reflect the ongoing effort to diversify the economy away from oil revenues, a central aim of the country's long-term economic plans. While oil activity weighed on headline GDP, the steady growth in non-oil sectors highlights how domestic demand continues to support jobs and business investment across the Kingdom.

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