Current Status

On Track — Saudi Arabia’s Riyad Bank PMI (formerly IHS Markit/S&P Global) has maintained readings above the 50.0 expansion threshold for the vast majority of the post-2016 period, indicating sustained non-oil private sector growth and business confidence.

Key Metrics

Trend Analysis

The Purchasing Managers Index provides one of the most timely and reliable signals of non-oil private sector health in Saudi Arabia. Compiled monthly from surveys of approximately 400 private-sector purchasing managers, the PMI captures real-time sentiment on output, new orders, employment, delivery times, and inventory levels. Saudi Arabia’s PMI has been remarkably robust since 2016, averaging approximately 56 over the full period — well above the 50.0 threshold that separates expansion from contraction.

The consistency of the reading is noteworthy. Outside of the brief COVID-19 disruption in April-May 2020 (when the PMI dropped to 42.4 and 48.1 respectively), the index has remained in expansionary territory in 47 of the 48 months from 2021 through 2024. This sustained above-50 performance is exceptional by global and regional standards, reflecting genuine private-sector dynamism rather than statistical artefact. The output sub-index, which measures actual business activity, has been particularly strong, averaging approximately 59 — indicating significant expansion rather than marginal growth.

The sub-component analysis reveals important structural insights. New orders have been consistently strong, driven by both domestic demand (giga-project supply chains, consumer services expansion) and export orders (manufacturing and services exports). The employment sub-index has remained above 50, indicating ongoing private-sector hiring that supports the Unemployment Rate and Saudisation KPIs. Input prices have moderated after the 2022 global commodity spike, reducing cost pressures on businesses. The delivery times component has normalised following pandemic-era supply chain disruptions, supporting operational efficiency across the non-oil economy.

Methodology

The Saudi Arabia PMI is compiled by S&P Global (formerly IHS Markit) in partnership with Riyad Bank. It is based on monthly survey responses from purchasing managers at approximately 400 non-oil private sector companies. The survey covers five main areas: new orders (30% weight), output (25%), employment (20%), suppliers’ delivery times (15%), and stocks of purchases (10%). The composite index is calculated as a diffusion index, where readings above 50 indicate improving conditions and below 50 indicate deterioration. The survey follows the methodology established by the Institute for Supply Management and used in PMI surveys across over 40 countries, ensuring international comparability. Responses are seasonally adjusted to remove calendar effects.

Related Priorities

The PMI serves as a high-frequency barometer of the Vision 2030 economic transformation’s impact on the private sector. It complements and often foreshadows the quarterly Non-Oil GDP Growth data, providing an early signal of acceleration or deceleration. Strong PMI readings confirm the effectiveness of policies supporting the Private Sector GDP Contribution target. The employment sub-index provides advance indication of Saudisation progress. The new export orders component signals progress on the Non-Oil Exports objective. The PMI’s consistent expansion also underpins business confidence, which supports Investment Opportunities and FDI attraction.

Outlook

Saudi Arabia’s PMI is expected to remain in expansionary territory through 2030, supported by the robust pipeline of domestic investment, maturing giga-projects entering operational phases, and continued growth in consumer-facing sectors. Readings in the 55 to 58 range are projected as the new normal, reflecting a structurally more dynamic non-oil private sector than existed before Vision 2030.

Potential downside risks include global economic slowdowns that could reduce export orders, tighter credit conditions affecting smaller firms, and the natural moderation that occurs as the economy matures from rapid catch-up growth to steady-state expansion. The Vanderbilt Portfolio views the PMI trajectory as one of the most consistently positive indicators in the Vision 2030 monitoring framework, providing ongoing confirmation that the private-sector transformation is producing real operational results.