RIYADH: Saudi Arabia’s Business Confidence Index stood at 55.5 in October, remaining firmly in optimistic territory despite a 1.1-point monthly decline, official data showed. 

The index, released by the General Authority for Statistics, remained above the 50-point threshold that separates optimism from pessimism, indicating continued confidence among business establishments outside oil-related activities. 

The reading followed a recovery from a low of 52.1 in March, when regional geopolitical tensions intensified.

Confidence subsequently improved to 54.5 in April, 55.6 in May and 56.6 in June. It eased to 56.5 in July before rising to 56.7 in August and 56.6 in September. 

Business confidence remained in optimistic territory despite regional uncertainty and geopolitical tensions that have affected supply chains and industrial activity in parts of the Middle East. 

The resilience in business confidence was also reflected in broader private-sector activity. The Riyad Bank Purchasing Managers’ Index, compiled by S&P Global, stood at 54 in October, indicating continued expansion in Saudi Arabia’s non-oil private sector. 

In its latest report, GASTAT said: “BCI reflects prevailing optimism in the business sector, supported by establishments’ confidence in the stability of economic activity and continued growth across various sectors.” 

Thomas Kuruvilla, managing partner of Arthur D. Little Middle East and India, said Saudi Arabia’s sustained business confidence was particularly noteworthy amid regional geopolitical uncertainty and global economic pressures. 

“What the Kingdom has achieved is not simply to stimulate economic activity, but to create confidence in its long-term economic direction,” he said. 

Kuruvilla added that Vision 2030 has provided strategic clarity, policy continuity and investment commitment, while creating opportunities across sectors beyond the traditional hydrocarbon economy. 

Sectoral outlook 

In October, the BCI for the industrial sector stood at 55.4 points, down 0.9 points from September, remaining above the neutral threshold. 

The BCI for the services sector stood at 54.2 points in October, a decline of 1.2 points from the previous month, according to GASTAT.  

The decreases in the industry and services indices were attributed to lower confidence among establishments, particularly regarding sales and input costs during the month. 

Construction retains positive outlook 

The construction sector’s BCI stood at 56.1 points in October, down 1.1 points from September, reflecting continued optimism among establishments in the sector. 

Kuruvilla said Vision 2030 has transformed the Kingdom’s construction sector into a key enabler of economic diversification. 

“Building on the remarkable scale of development achieved under Vision 2030, the next phase presents an opportunity to further maximize the long-term economic value generated by these investments,” he said.  

Kuruvilla added that domestic and foreign capital will increasingly favour projects demonstrating sustainable demand, credible returns and the ability to generate economic activity beyond the construction phase.