The seasonally adjusted Riyad Bank PMI for Saudi Arabia slipped to 55.4 in January, down from 57.5 in December, signaling a slowdown in growth. However, the upturn remained strong overall and widespread across sectors, highlighting the resilience of the non-oil economy. New business intake drove activity, but the rate of sales growth eased due to competitive pressures. Purchasing activity and inventory holdings grew sharply, although the rate of buying growth was at an eight-month low. Purchase prices for non-oil businesses in Saudi Arabia rose at the sharpest rate since May 2012, driven by strong demand, higher material prices, and increased supply chain risk amid the Red Sea crisis. Despite cost increases, output prices have remained low, indicating high market competitiveness.
In the UAE, the S&P Global PMI dropped to 56.6 in January from 57.4 in December, reflecting a slight moderation in growth but remaining much stronger than the long-run average. The UAE’s non-oil economy sustained its expansion, with January’s dip indicating a slight moderation from the sector’s best quarterly performance in four-and-a-half years. Both Saudi Arabia and the UAE continue their efforts to diversify their economies, open sectors for foreign investment, and support domestic industries. The UAE’s slower growth rate in January reflects a mild moderation after a robust quarterly performance, maintaining its positive economic trajectory.