Saudi Non-Oil PMI Hits 61.5 in May, Fastest Growth Since July 2024
66d ago|4 min readStandard
Fazen Markets Editorial Desk
Collective editorial team · methodology
saudi-arabiapmi
Fazen Markets Editorial Desk
Collective editorial team · methodology
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Saudi Arabia's non-oil private sector growth accelerated sharply in May 2026. The seasonally adjusted S&P Global Saudi Arabia Purchasing Managers’ Index rose to 61.5, a significant increase from April's 58.2. This marks the fastest pace of expansion since July 2024, according to data released on June 3, 2026. The reading extends the sector's streak of expansion above the critical 50.0 no-change threshold to 43 consecutive months.
The acceleration signifies a critical phase in the kingdom's long-term economic transition. Saudi Arabia's Vision 2030 reform agenda aims to decouple economic fortunes from volatile oil revenues. The last time the non-oil PMI was this strong was in July 2024 when it read 62.1, a period of accelerated government capital expenditure. The current expansion occurs amidst a backdrop of Brent crude trading near $78 per barrel, providing fiscal space for continued state-led investment.
The catalyst for May's surge appears multi-faceted. Global supply chain normalization and a stable Riyal-to-Dollar peg have eased import pressures for businesses. Domestically, sustained government spending on giga-projects like NEOM and the Red Sea Global tourism initiative has filtered through to the broader private sector. A marked increase in new export orders, particularly from neighboring Gulf Cooperation Council states, provided an additional demand boost.
The May PMI reading of 61.5 represents a 3.3-point month-on-month gain, the largest single-month jump in over a year. The headline index is a composite of five key sub-indices, all of which strengthened. The new orders sub-index climbed to 63.8, while the output sub-index reached 62.5. Business confidence for the year-ahead outlook also hit a seven-month high.
The employment sub-index, while still in expansion territory, grew at a more moderate pace, indicating firms are first utilizing existing capacity. Input cost inflation eased slightly to 56.1, suggesting some relief from previous supplier price pressures. For comparison, the United Arab Emirates' non-oil PMI for May was reported at 56.6, indicating Saudi growth is outpacing its key regional economic peer.
| Metric | April 2026 | May 2026 | Change |
|---|---|---|---|
| Headline PMI | 58.2 | 61.5 | +3.3 |
| New Orders Index | 60.5 | 63.8 | +3.3 |
| Output Index | 60.1 | 62.5 | +2.4 |
The data points to specific sectoral beneficiaries within the Tadawul All Share Index. Construction and building materials firms like Saudi Cement and Yanbu Cement see direct tailwinds from project activity. Financials, particularly Riyad Bank and Al Rajhi Bank, benefit from increased corporate loan demand and a healthier non-performing loan environment. The tourism and retail sector, represented by entities like Arabian Centers, gains from rising domestic consumer confidence.
A key risk to the outlook is the potential for renewed inflation if demand outstrips domestic supply capacity, which could pressure the Saudi Central Bank to tighten monetary policy ahead of the Federal Reserve. Institutional flow data from the first week of June shows increased foreign portfolio investment into Saudi equity ETFs, with a notable tilt towards mid-cap industrial names over large-cap energy stocks.
Market participants will scrutinize the preliminary Q2 2026 GDP figures, due for release in late July, for confirmation of the non-oil sector's contribution. The next PMI reading for June 2026 will be published on July 2, 2026, providing a crucial check on momentum. Key levels to monitor include the Tadawul All Share Index's attempt to sustain a break above the 12,500 resistance level, a threshold it has tested multiple times in 2026.
Should the PMI sustain readings above 60.0 through Q3, it would likely trigger upward revisions to full-year growth forecasts by major institutions like the IMF. Conversely, a retreat below 58.0 would signal the current surge may be a temporary spike rather than a sustained trend.
A Purchasing Managers' Index above 50.0 indicates expansion. A reading of 61.5 signals not just growth, but a rapid pace of expansion across output, new orders, and employment. For Saudi Arabia, it quantifies the velocity of its economic diversification. Historical data shows sustained periods with a PMI above 60.0 correlate with non-oil GDP growth exceeding 5% on an annualized basis.
Saudi Arabia's May PMI of 61.5 places it among the fastest-growing major economies surveyed by S&P Global. It significantly outpaces India's May manufacturing PMI of 57.5 and Brazil's composite PMI of 52.1. This outperformance is largely attributed to unique domestic fiscal stimulus from Vision 2030 projects, which provides a buffer against global economic headwinds that affect more export-reliant emerging markets.
The construction and materials sector exhibits the highest beta to PMI movements, as it directly feeds project pipelines. Commercial banking stocks are also highly sensitive, as PMI strength translates to corporate credit growth and better asset quality. In contrast, the primary petrochemical and energy sectors listed on the Tadawul show a weaker correlation, as their fortunes are more tightly linked to global commodity prices than domestic economic activity.
The May PMI surge proves Saudi Arabia's non-oil economic engine is accelerating, reducing its historic dependency on crude oil revenues.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.
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