Expanding activities in Saudi Arabia's non-oil sector, as indicated by Purchasing Managers' Index (PMI) reaching 56.4.

In August, the Kingdom of Saudi Arabia's non-oil private sector demonstrated a robust growth, outpacing its regional peers such as the UAE and Kuwait. This expansion was signalled by the Riyad Bank Saudi Arabia Purchasing Managers' Index (PMI), which rose from 56.3 in July to 56.4 in August, remaining above the 50-mark that separates growth from contraction.

The growth was driven by a combination of factors. Firms reported stronger new business inflows, supported by an uptick in export orders and continued growth in domestic demand. This expansion in new orders was partly due to a renewed rise in export sales.

Employment in the non-oil private sector continued to rise steeply in August, driven by new project initiations and greater skills requirements. The rate of hiring, while easing from recent peaks, still indicated a continued expansion.

Despite the positive growth, wage pressures eased slightly, and firms still faced broad cost challenges. Input prices remained elevated due to persistent pressures on material, transport, and technology-related expenses. Companies, however, attributed the growth to increased marketing in external markets and collaborations with clients across the Gulf Cooperation Council region.

Companies in Saudi Arabia raised their selling prices for the third consecutive month in August, citing higher costs and rising customer demand as the reasons. Despite these challenges, non-oil firms in Saudi Arabia expect positive outcomes in the coming months, citing rising demand, ongoing projects, and supportive government policies.

Naif Al-Ghaith, chief economist at Riyad Bank, stated that August's growth was driven by improving demand conditions, a modest rebound in output growth, and further gains in employment. He also noted an uptick in purchasing activity in August at a faster pace than in the previous survey period.

In August 2021, Saudi Arabian companies collaborated specifically to improve the growth of their export orders. However, the search results do not provide specific names or details about these companies or the nature of their cooperation.

This continued success of Saudi Arabia's non-oil private sector signals the continued success of the country's efforts to diversify its economy away from hydrocarbons under its Vision 2030 blueprint. The report noted an uptick in new order volumes, partly driven by a renewed rise in export sales, which is a positive sign for the future of Saudi Arabia's economy.