‎Saudi PMI falls to 48.8 points in March

The seasonally adjusted Riyad Bank Saudi Arabia Purchasing Managers’ Index (PMI), formerly SP Global Saudi Arabia PMI, dropped to 48.8 points in March 2026, with business conditions deteriorating for the first time in more than five-and-a-half years.

The 7.3-point drop in the index from the previous month was the second-largest decline since the survey began in 2009, after the 10.1-point fall recorded in March 2020 during the coronavirus pandemic, as business activity and new jobs were hit by the war in the Middle East.

According to the report, surveyed companies said new projects and client spending decisions were put on hold pending clarity on the outcome of the conflict. Export orders were particularly affected by regional disruption in March, with the latest data pointing to the fastest decline in nearly six years.

Non-oil companies’ responses indicated that the sharp decline in new export orders and weak domestic consumer confidence led to lower sales, prompting firms to scale back production. Supply chains were also affected, with companies citing shipping delays and higher transportation costs, which contributed to a significant buildup of backlogs of work. However, the impact on sector-wide price pressures was limited, as input costs rose at the slowest pace in a year due to weak demand.

According to the report, Saudi non-oil firms highlighted a strong impact on supply chains, with delivery times deteriorating at the fastest rate since June 2020, as shipping delays and higher fuel costs disrupted supply lines. Despite weaker orders, operational constraints drove a rise in backlogs across the non-oil sector at the fastest pace since July 2018.

Companies surveyed responded to the decline in order volumes by reducing their purchases of input materials. However, the reduction was moderate and followed a strong rebound in February. Moreover, total inventories continued to increase, indicating that efforts to reduce stock levels remained limited.

The seasonally adjusted Riyad Bank Saudi Arabia Purchasing Managers’ Index (PMI), formerly SP Global Saudi Arabia PMI, dropped to 48.8 points in March 2026, with business conditions deteriorating for the first time in more than five-and-a-half years.

The 7.3-point drop in the index from the previous month was the second-largest decline since the survey began in 2009, after the 10.1-point fall recorded in March 2020 during the coronavirus pandemic, as business activity and new jobs were hit by the war in the Middle East.

According to the report, surveyed companies said new projects and client spending decisions were put on hold pending clarity on the outcome of the conflict. Export orders were particularly affected by regional disruption in March, with the latest data pointing to the fastest decline in nearly six years.

Non-oil companies’ responses indicated that the sharp decline in new export orders and weak domestic consumer confidence led to lower sales, prompting firms to scale back production. Supply chains were also affected, with companies citing shipping delays and higher transportation costs, which contributed to a significant buildup of backlogs of work. However, the impact on sector-wide price pressures was limited, as input costs rose at the slowest pace in a year due to weak demand.

According to the report, Saudi non-oil firms highlighted a strong impact on supply chains, with delivery times deteriorating at the fastest rate since June 2020, as shipping delays and higher fuel costs disrupted supply lines. Despite weaker orders, operational constraints drove a rise in backlogs across the non-oil sector at the fastest pace since July 2018.

Companies surveyed responded to the decline in order volumes by reducing their purchases of input materials. However, the reduction was moderate and followed a strong rebound in February. Moreover, total inventories continued to increase, indicating that efforts to reduce stock levels remained limited.