Business activity across several Middle Eastern economies showed varying trends in June, according to newly released Purchasing Managers’ Index (PMI) data by S&P Global, with Saudi Arabia and Qatar posting the region’s strongest growth, while Lebanon remained in contraction territory.
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.
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, signalling 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 programme, which seeks to diversify the kingdom’s economy and reduce its reliance on oil revenues.
Riyad Bank chief economist Naif Al Ghaith said: “The latest reading reflects a strong improvement in overall business conditions, supported by higher output levels, rising demand, and an active labour 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.”
Qatar’s non-energy private sector PMI rose to 52 in June from 50.8 in May, marking the fastest expansion since March.
The improvement was largely driven by rising output and employment, although declines in new orders and inventory, as well as quicker supplier delivery times, slightly tempered the overall gains.
Employment in Qatar grew at one of the sharpest rates in the survey’s eight-year history, reflecting companies’ efforts to address rising backlogs of work.
“The strength of the PMI in Qatar continues to rest on robust hiring despite weaker new business trends,” said Trevor Balchin, economics director at S&P Global Market Intelligence.
He added that easing purchase price pressures enabled businesses to reduce prices, with wage growth also approaching a near-record pace.
In the UAE, the PMI rose modestly to 53.5 from 53.3 the previous month, maintaining growth despite signs of slowing demand.
The uptick came as firms accelerated efforts to reduce backlogs and stabilise inventories.
However, S&P’s senior economist David Owen noted that regional tensions, particularly the conflict between Israel and Iran, weighed on new orders, which fell to a nearly four-year low.
“Input costs rose at their slowest pace in almost two years, enabling firms to offer price cuts and support future demand recovery,” Owen said.
Kuwait’s PMI dipped to 53.1 from 53.9, reaching a three-month low.
Nonetheless, the index remained above the neutral 50 threshold, indicating continued growth in the non-oil private sector.
A record rise in employment helped offset slower demand, though outstanding orders continued to pile up.
Andrew Harker, economics director at S&P Global, said Kuwaiti firms remain well-positioned for the second half of the year, backed by steady orders and improving workforce capacity.
Meanwhile, Lebanon’s PMI edged up to 49.2 from 48.9, signalling a softer contraction in private sector activity. Business sentiment, however, remained pessimistic.
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