(Reuters) - Strong demand drove growth in Saudi Arabia's non-oil business sector in December, albeit at a slightly slower pace than the previous month, a survey showed on Sunday.
The seasonally adjusted Riyad Bank Saudi Arabia Purchasing Managers' Index (PMI) fell to 58.4 in December from a 17-month high of 59.0 in November. Despite the dip, headline PMI remained well above the 50.0 mark denoting growth.
New orders continued to rise, marking the fifth consecutive month of acceleration, driven by strong domestic demand and a boost in exports. The subindex surged to 65.5 in December from 63.4 the previous month, and the pace of growth was the fastest recorded in 2024.
"Saudi Arabia's non-oil private sector ended 2024 on a high note, reflecting the successful strides made under Vision 2030," said Naif Al-Ghaith, Chief Economist at Riyad Bank, referring to the country's ambitious programme to diversify its economy.
Cost pressures remained a concern, with input prices rising sharply due to strong demand for materials. However, wage inflation eased, helping to mitigate overall cost burdens.
Business expectations improved to a nine-month high in December, with firms optimistic about continued growth in 2025.
The non-oil GDP is expected to grow by more than 4% in 2024 and 2025, driven by substantial improvements in business conditions, Al-Ghaith added.
The Saudi government plans to step up strategic spending on huge projects to meet its Vision 2030 goals, especially the elements with tight deadlines. Last month, the kingdom was officially announced as host nation for the 2034 soccer World Cup.