Saudi Arabia’s Non‑Oil Private Sector Contracts Sharply as Regional Tensions Weigh on Business

Saudi Arabia’s Non‑Oil Private Sector Contracts Sharply as Regional Tensions Weigh on Business
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Saudi Arabia’s non‑oil private sector experienced a notable slowdown in March 2026, with business activity falling into contraction for the first time in nearly six years, according to official purchasing manager data.

The Riyad Bank‑S&P Global PMI, a widely used measure of business conditions, dropped to 48.8 in March from 56.1 in February — a level that signals reduced overall activity in the non‑oil private sector. A reading below 50 indicates contraction rather than expansion.

Analysts link this downturn partly to ongoing geopolitical tensions in the Middle East, which have created uncertainty for regional trade, investment and supply chains. Many companies reported slower new orders and delays in receiving goods, which weighed on confidence and production.

Firms also cited weaker demand from overseas markets, particularly for exports, as well as higher transport and logistics costs that have made business planning more difficult in recent weeks. As a result, many businesses saw inventories build up and scaled back operations.

For many Saudi companies outside the oil sector, the latest figures underscore a period of strain, as they adjust to a more uncertain economic environment influenced by developments beyond the kingdom’s borders.