The latest Purchasing Managers’ Index (PMI) survey issued by S&P Global indicates that businesses in Kuwait are demonstrating resilience despite ongoing regional challenges, with production and new orders recording their slowest rate of decline since April.
According to the report, the headline PMI rose to a three-month high of 47.2 in May, up from 46.3 in April. However, the index remained below the 50-point threshold that separates growth from contraction, signaling that the non-oil private sector is still experiencing a mild slowdown in overall business conditions during the second quarter of 2026.
The survey showed that while output and new orders continued to decline, the pace of contraction eased significantly. Improved marketing and promotional activity helped support business sentiment, contributing to a more stable operating environment.
However, new export orders continued to fall sharply, with respondents citing the impact of regional conflict and weaker international demand. Some companies also reported disruptions linked to border closures, including reduced business flows from abroad.
Despite these challenges, business confidence improved markedly, reaching a three-month high as firms expressed optimism about future activity, even as geopolitical tensions remain a concern.
On the operational side, employment levels in the non-oil private sector declined for the third consecutive month, though at a modest pace. Companies were largely able to manage workloads, leading to a continued reduction in backlogged work.
Firms also reported sufficient inventory levels, prompting a sharp fall in new purchasing activity and a significant drawdown in stocks. Input purchases declined at their fastest rate since April 2020, reflecting weaker demand conditions.
Cost pressures increased during the month, with businesses reporting higher spending on items such as advertising, rent, and spare parts. The rise in input costs led companies to continue increasing selling prices for goods and services, extending a 15-month streak of price hikes, although inflation remained relatively moderate.
Overall, the survey suggests that while Kuwait’s non-oil private sector is still under pressure, conditions are gradually stabilizing, with early signs of recovery in business sentiment.
