Saudi Arabia GDP: Non-Oil Sector Growth Sustains Economic Momentum in May 2025

Saudi Arabia’s non-oil private sector stayed on a strong growth path in May 2025, an encouraging sign that the Kingdom’s diversification efforts under Vision 2030 are paying off. According to the latest Riyad Bank Purchasing Managers’ Index (PMI), the sector posted a score of 55.8, up slightly from 55.6 in April. Any figure above 50 signals expansion.

A Strategic Shift, Now Bearing Fruit

Saudi Arabia is rewriting its economic story. The non-oil sector now makes up more than 54% of the nation’s GDP, a shift fueled by Vision 2030’s focus on building a future-ready economy. The latest PMI numbers reflect this transformation, with construction leading the charge in driving new business.

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While global oil markets remain unpredictable, Saudi Arabia is steadily building a more balanced economic engine, anchored in services, tourism, logistics, and manufacturing. And with continued strength in the PMI, investor confidence appears to be holding firm.

Inside May’s PMI Momentum

Here’s what stood out from the latest data:

• New Orders Are Climbing: Demand from both domestic and international markets remains strong, especially in construction, logistics, and services.
• Hiring on the Rise: Companies are adding staff, signaling optimism about future demand and long-term capacity.
• Costs vs. Competitiveness: Input costs went up, mainly due to materials and staffing, but many service providers lowered selling prices to stay competitive.

For companies weighing regional expansion, steady PMI growth is a tangible vote of confidence in Saudi Arabia’s economic direction.

What It Means for Global Businesses

Saudi Arabia’s GDP is expected to grow 4.6% in 2025, according to local forecasts. Even the IMF, with a more conservative estimate, projects 3% growth. The key takeaway? The Kingdom’s growth engine is shifting gears, from oil to innovation, infrastructure, and high-growth sectors.

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For multinational firms and ambitious regional SMEs, this marks a turning point. Industries that were once peripheral, like logistics, fintech, real estate, and hospitality, are now front and center in the country’s economic ambitions.

What Businesses Should Watch

If Saudi Arabia is on your radar, here are a few insights to keep in mind:

• Targeted Growth Sectors: Real estate, infrastructure, ICT, and tourism are expanding quickly, driven by regulatory reform and mega-projects like NEOM.
• Simplified (But Not Simple) Setup: While setting up a business is easier than before, navigating the 20-step process still benefits from local insight.
• Serious About Diversification: The push toward non-oil growth is backed by state budgets, sovereign funds, and long-term policy commitments.

At Peninsula, we’ve supported over 1,500 companies, from startups to giants like Amazon, in establishing a foothold in Saudi Arabia. Across the board, we’re seeing the same trend: the most promising opportunities aren’t in hydrocarbons. They’re in the sectors reshaping the Kingdom’s future.

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The data confirms what we’ve been seeing on the ground for months, Saudi Arabia’s economy is being re-engineered in real time. The opportunities are real, but only for those who move with intent and insight.

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If your business is considering expansion into Saudi Arabia, now is the time to act. Peninsula offers a free consultation to assess your market readiness and guide your entry with precision.

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About Alistair:

‍Alistair Paine brings 15 years of dedicated experience in Saudi market entry, guiding Fortune 500 companies and innovative scale-ups through successful establishment in the Kingdom. His expertise in Saudi company formation, licensing and market entry strategy, positions him as a leading authority and consultant in international business expansion to Saudi Arabia.

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Schedule a free consultation with Alistair and the Peninsula team to understand which market entry strategy is best suited to your business setup in Saudi Arabia.

Email: Alistair@peninsulacs.com

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