S&P: Non-oil private sector growth continues

Ibrahim Mohammed: S&P Global revealed that Kuwait’s non-oil private sector continued its growth for the fourth consecutive month in October 2026, driven by accelerating production activity and rising new orders, alongside record-high levels of company purchases and production supplies inventories, amid improving business expectations for the next twelve months.

Data from the Purchasing Managers’ Index (PMI) showed the main index rose to 52.9 points in October, compared to 52.4 points in September, marking its highest reading in two months and maintaining its position above the 50-point threshold for the fourth consecutive month, reflecting continued improvement in business conditions within the sector.

The data indicated that new orders recorded the fastest expansion rate since February 2026, supported by improved domestic demand and increased business inflows from foreign markets. Meanwhile, growth in new export orders accelerated as Kuwaiti companies secured orders from clients in neighboring countries.

The improvement extended to production levels, which continued to grow in October at a faster pace than in September, driven by higher volumes of new business and the expansion of companies’ operational activities. Participating companies attributed this performance to the launch of new products, intensified marketing campaigns, and the adoption of competitive pricing policies, which contributed to increased demand and higher business volumes.

At the purchasing activity level, index results showed that purchases of production supplies and companies’ inventories recorded the highest growth rates since data collection began, in direct response to the rise in new orders and the expansion of production activity. Companies revealed their intention to strengthen their inventories and take advantage of supplier offers, aiming to secure their operational needs ahead of expected price increases for materials in the coming months.

Conversely, supply conditions improved noticeably, as supplier delivery times recorded the shortest periods since data monitoring began, supported by increased competition among suppliers and improved availability of production supplies.

In the labor market, companies continued to increase their workforce for the third consecutive month, although the pace of hiring remained limited compared to the growth rates of orders and production. Survey results indicated that workloads continued to rise for the fourth consecutive month, at a strong pace approaching the record level recorded last February, after some companies linked project delays to staff shortages.

Regarding prices, the index tracked escalating inflationary pressures in October, with production supply costs rising at the fastest pace since February 2026, due to increased spending on advertising, machinery maintenance, spare parts, and employee costs. These developments were reflected in product and service prices, which recorded a noticeable increase, although the rate of increase remained slightly below the record level set in September 2021.

In his commentary on the index results, Andrew Harker, Economics Director at S&P Global Market Intelligence, confirmed that Kuwait’s non-oil private sector recovery solidified in October, with companies succeeding in attracting new orders and increasing business volumes. He explained that companies responded to rising workloads by intensifying their purchases and strengthening their inventories, noting that part of this expansion aimed to avoid future price increases.

He noted that employment continues to register modest growth, despite the number of workers rising for the third consecutive month, clarifying that some companies have linked delays in project implementation to labor shortages, amid a continued gradual and stable hiring approach. On the outlook, data showed an improvement in business confidence regarding activity over the next twelve months for the fourth consecutive month, reaching its highest level since February 2026. The positive expectations were based on anticipated results from increased marketing activities and the adoption of competitive pricing, which will help attract more customers and boost business growth in the coming period. The Kuwait Purchasing Managers’ Index is based on five main components: new orders, production, employment, supplier delivery times, and purchase inventories. A reading above the 50-point threshold indicates an improvement in business conditions compared with the previous month.