Saudi SME New Order Growth Hits a 7-Month High as the SME PMI Reads 53.8 in September
Saudi Arabia’s small and medium-sized enterprises logged their fastest growth in new orders for seven months in September, and the Riyad Bank Saudi Arabia SME PMI, compiled by S&P Global and released at 04:15 GMT on 12 October, read 53.8. That puts the index 3.8 points above the neutral 50.0 value, on our calculation, and marks a fifth consecutive month in growth territory. It was the second-highest reading since February.
The index is published quarterly and tracks business conditions at firms with fewer than 250 employees. It is separate from the monthly headline Saudi PMI for the non-oil economy, which read 55.3 for September when it was published on 5 October, so the 53.8 here describes smaller private sector firms, not the headline measure.
Third-Quarter Average Climbs to 52.7 From 51.4
The quarter is where the improvement shows most clearly. The SME PMI averaged 52.7 in July to September against 51.4 in April to June, a gain of 1.3 points.
September’s 53.8 sits 1.1 points above the 52.7 average, so the quarter closed above its own average. Large enterprises again posted the higher reading: their equivalent third-quarter average was 55.0, 2.3 points ahead of smaller firms, on our calculation.
Saudi SME PMI Stays Above the 50 Growth Line
| Period | PMI reading | Points above 50 |
|---|---|---|
| September 2026 | 53.8 | 3.8 |
| August 2026 | 53.9 | 3.9 |
| Q3 2026 average | 52.7 | 2.7 |
| Q2 2026 average | 51.4 | 1.4 |
| Large firms, Q3 average | 55.0 | 5.0 |
Seasonally adjusted; readings above the neutral 50.0 value signal an improvement in business conditions. Points above 50 are our calculation. The SME series starts in January 2013.
Demand Leads as Hiring and Purchasing Gather Pace
New business did the heavy lifting. Order growth was the fastest since February, carried by a sustained rebound in sales enquiries and resilient domestic economic conditions. New orders carry the largest weight in the SME PMI, 30 percent, and together with output at 25 percent they account for 55 percent of the reading, on our calculation, so the fastest order growth in seven months feeds straight into the index.
Hiring followed. Job creation at smaller firms was the fastest since March, a six-month high, and employment is the third-largest component at 20 percent. Orders, output and employment together make up 75 percent of the index, on our calculation. Firms also stepped up purchasing: input buying rose at the sharpest rate in seven months, driven by stronger demand and planned growth in activity.
Supply chains improved as well. Suppliers’ delivery times shortened again in September, reflecting successful efforts to diversify supply chains. Costs moved the other way. Higher raw material and transportation costs produced another strong increase in input prices, and firms raised their own selling prices strongly too.
Saudi SME Survey Components in September
| Component | Weight in PMI | September signal |
|---|---|---|
| New orders | 30% | Fastest growth since February |
| Output | 25% | Strong growth |
| Employment | 20% | Fastest job creation since March |
| Suppliers’ delivery times | 15% | Shortened again |
| Quantity of purchases | Not in PMI | Sharpest rise in 7 months |
| Input prices | Not in PMI | Strong increase |
| Output prices | Not in PMI | Strong increase |
| Future output | Not in PMI | Positive |
Stocks of purchases carries the remaining 10 percent of the PMI weight; the release gave no September detail for it. Component index values were published in chart form only.
Naif Al-Ghaith, chief economist at Riyad Bank, said the results provide “an encouraging signal on the underlying strength and resilience” of the SME sector. He pointed to the fastest new order growth in seven months and the quickest hiring in six, and said the results reinforce the role smaller firms play in Saudi Arabia’s economic diversification under Vision 2030, including job creation and private-sector development.
The index eased by 0.1 points from August. Output growth remained strong but was less marked than August’s eight-month high, and confidence in the year ahead, while still positive, eased from August and remained below June’s recent peak. Some firms cited geopolitical tensions and elevated cost pressures as headwinds.
Why it matters: Smaller firms are where a broader non-oil economy shows up in everyday hiring and new business, and September’s survey has both moving in the right direction. A third-quarter average of 52.7, up from 51.4, says the pace of expansion at Saudi SMEs picked up from the previous quarter. With new orders, employment and purchasing all accelerating together, that expansion is being led by demand, the component that carries the largest weight in the index.
Outlook: The next headline Saudi PMI, covering October, is scheduled for 04:15 GMT on 3 November. The next SME report follows in January 2027 with data for each month of the fourth quarter; with September already at 53.8, a fourth-quarter average above the third quarter’s 52.7 would mark another quarter of faster expansion. Firms tied their optimism to positive sales pipelines and hopes of greater regional stability, and the seven-month high in new orders gives that pipeline a firm starting point.
Sources: S&P Global, Riyad Bank, The Edge.
