2026.04.0504:49:43UTC+00Saudi Non-Oil PMI Tumbles to Second Lowest on Record

Riyad Bank Saudi Arabia’s PMI fell sharply to 48.8 in March 2026 from 56.1 in February, indicating the first contraction in the non-oil private sector in nearly six years and the steepest downturn since the record low of March 2020. The decline was driven by disruptions linked to the Middle East conflict, which strained supply chains and prompted clients to delay spending.

New orders stagnated, export demand recorded its largest contraction in six years, and output growth moderated. Purchasing activity slowed, yet inventories increased, suggesting only limited drawdowns of existing stock. Employment continued to rise but at a weaker rate, while supplier delivery times lengthened at the fastest pace since June 2020 amid shipping delays and higher fuel costs. Supply constraints pushed backlogs of work to their highest level since July 2018.

On the inflation front, overall input costs registered their smallest increase in a year, reflecting softer wage pressures. However, higher fuel and freight expenses drove up both purchasing and selling prices. Business sentiment fell to its lowest point since June 2020, as concerns over the regional conflict outweighed the positive impact of ongoing government spending.