July's Purchasing Managers' Index in Kuwait records a climb to 53.5
Kuwait's non-oil private sector continues to expand, as indicated by the Purchasing Managers' Index (PMI) of 53.5 in July 2025, marking the 11th consecutive month of growth. The index, which signals expansion when above 50, showed a slight decrease from June's 53.1, representing the softest pace of growth in three months [1].
The ongoing expansion is driven by robust new orders, advertising efforts, and a rebound in the real estate investment segment. The real estate sector, in particular, saw a surge in Q2 2025, bolstered by regulatory reforms, improved developer sentiment, and the expected approval of a housing finance law to ease home financing access. Credit growth to the real estate sector and demand in urban districts have further bolstered activity [2].
Despite the positive outlook, residential affordability remains a challenge, and seasonal slowdowns are expected in Q3. However, the firm-level investment and advertising activities aimed at meeting growing orders suggest a likely positive effect on non-oil private sector employment [3].
Andrew Harker, Director of Economics at S&P Global, expressed confidence in future growth, anticipating a rebound in employment activity in the coming months [1]. The government and private sector reforms, aimed at promoting workforce nationalization and digitalization, including in the oil sector, may indirectly support broader employment opportunities in services tied to non-oil growth [5].
Optimism in the sector dipped to a three-month low, but the rise was primarily driven by a sharp and accelerating increase in new orders. Output growth remained robust but was the slowest in four months, and mild backlogs were accumulated, though the increase was the weakest since January [1]. Some firms cited cost concerns and project completion pressures as reasons for hiring delays, while some companies reported limited ability to pass on higher input costs due to price reductions offered to attract business [1].
In conclusion, while Kuwait's non-oil private sector growth is less pronounced than some regional peers, it proceeds on a solid footing with reforms and market demand driving progress into Q3 2025. The sector is expected to maintain its momentum into the second half of the year, underpinned by continued improvement in non-oil private sector activity.
References:
[1] S&P Global (2025). Kuwait PMI®: Non-oil private sector expands at softest pace in three months in July. [online] Available at: https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/kuwait-pmi-non-oil-private-sector-expands-at-softest-pace-in-three-months-in-july
[2] Al-Rai (2025). Kuwait's non-oil private sector expands in Q3 2025, driven by new orders and real estate investments. [online] Available at: https://www.alraichannel.net/business/kuwait-s-non-oil-private-sector-expands-in-q3-2025-driven-by-new-orders-and-real-estate-investments/
[3] Arab Times (2025). Kuwait's non-oil private sector maintains momentum into Q3 2025. [online] Available at: https://www.arabtimesonline.com/business/kuwait-s-non-oil-private-sector-maintains-momentum-into-q3-2025/
[4] Kuwait Times (2025). Kuwait's economy: Key challenges and opportunities. [online] Available at: https://www.kuwaittimes.net/business/economy/kuwait-s-economy-key-challenges-and-opportunities/
[5] Gulf Business (2025). Kuwait's non-oil private sector employment outlook positive. [online] Available at: https://gulfbusiness.com/kuwaits-non-oil-private-sector-employment-outlook-positive/
The real estate sector's surge in Q2 2025, bolstered by regulatory reforms and anticipated approval of a housing finance law, indicates a strong correlation between real estate investment and non-oil private sector growth. This growth is expected to continue, with the non-oil private sector business activity keeping its momentum into the second half of the year.
