Standard & Poor's: Kuwait's non-oil private sector improves

Data from the main Kuwait Purchasing Managers’ Index (PMI), which measures the performance of the non-oil private sector and was released by S&P Global, showed the index rising to 53.6 points in August 2026, up from 50.8 points in July, surpassing the neutral 50-point mark for the second consecutive month. Activity is accelerating. The report noted that the improvement in the non-oil private sector’s performance came at levels only slightly below those recorded in February, just before the outbreak of war in the region, supported by increased business activity and new orders. It pointed out that competitive pricing, marketing activities, and the provision of high-quality products contributed to boosting demand, as production volumes and new orders rose for the second consecutive month at their strongest pace since February. Companies also benefited from a recovery in new export orders and their success in securing sales from customers in neighboring countries. Optimism is rising. The report indicated that improved demand bolstered companies’ confidence regarding activity over the next twelve months, with optimism levels rising compared to July and approaching those recorded before regional tensions. On the employment front, non-oil private sector companies increased their workforce in August for the first time in six months, but the pace of hiring remained “modest” compared to the strong growth in demand, leading to a continued accumulation of unfinished work for the second consecutive month. Companies also intensified their purchases of production inputs to rebuild inventories after a period of decline, recording the fastest growth in purchasing since the survey began in September 2018, alongside inventory levels reaching their highest point ever. Suppliers’ performance is improving. The report highlighted an improvement in suppliers’ performance, as their quick response to orders helped reduce delivery times at the largest rate since February. Conversely, cost pressures rose in August, with inflation in production inputs hitting a six-month high, driven by increases in wages, maintenance, marketing, raw materials, and utilities costs. Hiring costs also rose at the fastest pace since the beginning of 2026. Despite rising operating costs, companies noticeably increased the prices of their products and services, while some resorted to offering discounts to support sales growth.