RIYADH: Saudi Arabia’s non-oil private sector expanded at its fastest pace in three months in June, supported by rising domestic demand, accelerated hiring, and a pickup in purchasing activity, a survey showed. 

According to Riyad Bank’s Purchasing Managers’ Index compiled by S&P Global, the headline PMI rose to 57.2, up from the 55.8 figure recorded in May, signaling a strong improvement in business conditions and surpassing the long-run average of 56.9.

The index remains well above the neutral 50 mark, indicating sustained expansion across the Kingdom’s non-oil economy. 

The robust growth in Saudi Arabia’s non-oil business activity aligns with the broader goals of the Vision 2030 program, which seeks to diversify the Kingdom’s economy and reduce its reliance on oil revenues. 

Saudi Arabia’s PMI for June outpaced that of its regional peers, with the UAE and Kuwait recording readings of 53.5 and 53.1, respectively. 

Naif Al-Ghaith, chief economist at Riyad Bank, said: “The latest reading reflects a strong improvement in overall business conditions, supported by higher output levels, rising demand, and an active labor market.”  

He added: “Firms largely linked the pickup in activity to improving sales, new project starts, and better demand conditions, although the pace of output growth was softer compared to previous highs.” 

In May, a report released by Saudi Arabia’s General Authority for Statistics revealed that the Kingdom’s gross domestic product grew 2.7 percent year on year in the first quarter, driven by strong non-oil activity. 

Commenting on the GDP figures at the time, Minister of Economy and Planning Faisal Al-Ibrahim, who also chairs GASTAT’s board, noted that the contribution of non-oil activities to the Kingdom’s economic output reached 53.2 percent — an increase of 5.7 percent from previous estimates. 

The minister also added that the Kingdom’s economic outlook remains positive, supported by structural reforms and high-quality, state-led projects across various sectors. 

In its latest PMI report, S&P Global stated that non-oil firms in the Kingdom reported a further rise in new orders in June, with the rate of growth continuing to accelerate from its recent low in April. 

Companies that participated in the survey noted that the acquisition of new clients and the benefits of enhanced marketing had improved demand growth across non-oil sectors. 

“New orders continued to lead the expansion, registering the fastest growth in four months and surpassing the long-run trend. Businesses credited this increase to stronger demand, effective marketing strategies, and improved client acquisition,” added Al-Ghaith. 

According to the report, non-oil private companies in Saudi Arabia hired staff at the fastest rate since May 2011, as firms expanded teams to manage increased workloads. 

This historically strong increase continued a robust period of job creation seen since the start of 2025, with companies citing high demand for skilled staff as a driving force behind intensified recruitment efforts and increased salary offers. 

Consequently, overall staff costs rose at the fastest pace since the survey began in 2009. 

Purchasing activity accelerated to a two-year high as firms responded to rising input needs, with nearly 40 percent of respondents increasing their purchases. 

Input prices also rose sharply, aligning with the trend observed in the second quarter of the year. This compelled companies to pass on higher costs to customers, although some businesses opted to reduce prices as part of competitive pricing strategies. 

Despite price pressures, non-oil firms in Saudi Arabia remained confident of an uplift in activity over the next 12 months, with sentiment ticking up to a two-year high. 

S&P Global stated that this optimism for future growth was largely driven by resilient domestic economic conditions, robust demand, and improving sales pipelines. 

“On the future outlook, sentiment among non-oil businesses remains highly positive. Confidence about future activity climbed to a two-year peak, supported by healthy order pipelines and stronger domestic economic conditions. However, cost pressures became more pronounced in June,” said Al-Ghaith. 

He noted that staff costs had risen at a record pace as firms sought to retain talent, while purchase prices recorded their fastest increase since February, partly due to stronger demand and rising geopolitical risks.

“Despite these cost challenges, firms broadly raised their selling prices, reversing the declines seen in May and signalling an improved ability to pass on higher costs to customers,” said Al-Ghaith. 

The PMI survey data were collected from around 400 private sector companies across the manufacturing, construction, and wholesale sectors, as well as retail and services. 

RIYADH: Global oil demand climbed by 1.49 million barrels per day, or 1.5 percent, year on year in 2024 to reach an average of 103.84 million bpd, according to newly released data from the Organization of the Petroleum Exporting Countries.

Demand rose across nearly all regions, with the strongest gains recorded in non-OECD Asia, particularly China and India, followed by the Middle East, Africa, Latin America and OECD Europe. Within OPEC member countries, oil demand rose by 0.12 million bpd, or 1.3 percent, year on year.

However, total world crude oil production declined for the first time since 2020, falling by 0.77 million bpd, or 1 percent, to average 72.58 million bpd in 2024. OPEC attributed the drop to lower output from both its members and non-OPEC producers participating in the Declaration of Cooperation.

OPEC nations cut production by 0.57 million bpd, or 2.1 percent, while non-OPEC DoC participants saw a steeper decline of 0.78 million bpd, or 5.2 percent. In contrast, crude production from countries not involved in the DoC rose by 0.58 million bpd, or 1.8 percent.

Refining capacity

Global refining capacity increased by 1.04 million bpd in 2024 to reach 103.80 million bpd. Most of this expansion came from the non-OECD region, notably China, India, and the Middle East.

For the first time since 2019, members of the Organisation for Economic Co-operation and Development also saw a modest increase in refining capacity—up by 0.16 million bpd—driven by additions in the Americas, although partially offset by closures in Europe and Asia Pacific.

Refinery throughput also saw a modest rise, growing by 0.52 million bpd, or 0.6 percent, to 85.97 million bpd. This was largely due to increased run rates in OECD Americas and non-OECD regions, including the Middle East, Africa, India, and Other Asia.

Exports down, product shipments up

OPEC’s crude oil exports declined by 0.70 million bpd, or 3.5 percent, in 2024 to average 19.01 million bpd. Asia continued to be the primary destination for OPEC crude, receiving 13.67 million bpd, or 71.9 percent of total exports.

In contrast, exports of petroleum products from OPEC members rose by 0.29 million bpd, or 6.1 percent, reaching an average of 5.07 million bpd during the year.

Global proven crude oil reserves stood at 1,567 billion barrels at the end of 2024, marking a slight increase of 2 billion barrels, or 0.1 percent, from the previous year. Proven reserves in OPEC members remained unchanged at 1,241 billion barrels.