New orders surged in February, supported by rising domestic sales, favorable government policies, stronger consumer spending, enhanced digital initiatives, and collaborative client projects, while international orders grew at a slower pace.

Order activity remained a primary growth driver, with government support, digital development, and client collaborations expanding both domestic and international sales, the latter rising for a seventh consecutive month but more gradually.

Analysts adjusted forecasts in response to evolving conditions, with JPMorgan trimming its 2026 Gulf non-oil growth outlook and its Saudi Arabia outlook due to ongoing uncertainty about the figures.

Cost pressures rose as supplier and metal prices increased, but a fall in fuel payments helped limit overall purchase-price inflation; selling charges climbed near the steepest pace since May 2023.

Wage-driven cost pressures fed through to higher selling prices, with inflation near its fastest since May 2023, driven by stronger supplier charges and metals costs alongside lower fuel payments.

External risk remained as Iran’s retaliatory strikes disrupted Gulf airports and ports, affecting regional markets.

Delivery times shortened, signaling improved supply chains as input purchases rose sharply and vendor coordination improved with rising workloads.

Input purchases accelerated and supply chains became more efficient through operational changes and vendor shifts, contributing to the best delivery times in nine months.

Saudi Arabia’s non-oil private sector growth slowed in February to a nine-month low, with the Riyad Bank PMI at 56.1, indicating continued expansion but at a softer pace.

Naif Al-Ghaith of Riyad Bank noted that the non-oil private sector stayed in expansion territory, though the pace of output growth was the slowest since August.

The PMI reading confirmed February expansion at 56.1, still well above the 50.0 threshold despite deceleration.

Robust domestic demand and steady project approvals supported PMI strength, underscoring ongoing diversification away from oil dependence.