Saudi Market Research Trends: PMI 58.1, Job Growth Surges
Saudi Arabia’s non-oil private sector maintained strong expansion in March 2025, despite a slight moderation in the Purchasing Managers’ Index (PMI) to 58.1, down from February’s 58.4. While this represents the softest growth rate in five months, the index remains well above the 50.0 threshold, signaling continued economic expansion. Saudi market research trends also revealed that Q1 2025 saw the fastest job growth in over 12 years, reinforcing Saudi Arabia’s labor market strength and its sustained economic expansion.
The Kingdom’s non-oil economy witnessed steady demand growth, with new orders registering at 63.2, slightly lower than February’s 65.4, which marked a near 14-year high. While foreign demand saw a slowdown, domestic sales remained strong, particularly in manufacturing, logistics, financial services, and tourism. Firms responded to evolving market conditions by stockpiling inventories, anticipating sustained consumer activity and business expansion.
Regional Competitiveness: Saudi Arabia Leads Middle Eastern Markets
Despite the slight decline, Saudi Arabia’s PMI remains the highest in the region, surpassing key Middle Eastern peers, including UAE (54.0), Kuwait (52.3), and Qatar (52.0). This comparative strength underscores the Kingdom’s ability to navigate economic fluctuations, reinforcing business confidence and investor appeal.
Employment conditions held firm, with March continuing the strong hiring momentum from February’s 16-month peak. Companies focused on expanding their workforce, particularly in sales teams and operational capacity, reflecting long-term optimism in the market. The latest employment data indicates that Q1 2025 saw the fastest job growth in over 12 years, further strengthening Saudi Arabia’s labor market.
Investment Strategy: $100 Billion FDI Supports Saudi Market Research Trends
Saudi Arabia’s aggressive efforts to attract $100 billion annually in foreign direct investment (FDI) remain a critical driver of private sector expansion. Government-led reforms to enhance regulatory frameworks and infrastructure development have bolstered investor confidence, leading to higher capital inflows into key industries.
The Kingdom’s Vision 2030 initiative continues to push economic diversification, with the non-oil sector contributing over 52% of GDP—a notable increase from previous years. By 2030, Saudi Arabia aims for a 65% GDP share from non-oil industries, signaling a significant structural transformation. These ambitions align with global market positioning efforts, fostering long-term sustainability beyond oil reliance.
Pricing Adjustments: Cost Inflation Eases to Lowest Level in Four Years
Saudi firms experienced easing input cost inflation, with rates dropping to their lowest level in over four years. Weaker purchase prices and moderated wage inflation allowed businesses to reduce selling prices for the first time in six months, strengthening competitive positioning.
Additionally, the Kingdom’s non-oil exports surged by 10.7% in January, reaching SR26.48 billion ($7.06 billion)—a clear indicator of rising global demand for Saudi non-oil goods. Market participants expect pricing flexibility to enhance trade competitiveness, enabling businesses to maintain healthy margins despite intense market competition.
Operational Challenges: Backlogs Increase as Demand Outpaces Capacity
While demand remains robust, backlogs of work increased at the fastest rate since August 2018, reflecting capacity constraints among firms managing higher order volumes. This underscores the need for operational scaling, as businesses optimize production strategies to align with market expectations.
Survey data indicates a slight softening in business activity expectations for the year ahead, particularly in export-driven sectors. However, domestic consumer confidence remains steady, supporting broader economic stability as Saudi Arabia enhances infrastructure and workforce capabilities.
Future Outlook: Sustained Growth in Saudi Market Research Trends
Saudi Arabia’s economic diversification push, coupled with strong workforce expansion, competitive pricing strategies, and robust investment flows, ensures continued resilience amid market fluctuations. As firms strengthen supply chains, optimize operations, and refine global market positioning, the Kingdom remains at the forefront of Middle Eastern economic transformation, setting the foundation for long-term, sustainable growth beyond oil dependency.
Also Read: Emerging Market Trends in Saudi Arabia Post-Pandemic 2024
