The seasonally adjusted Riyad Bank Saudi Arabia Purchasing Managers' Index recovered to 57.2 in February, up from 55.4 in January which was the lowest reading in two years.
The sub-index for output rose to 61.5, the quickest pace of growth since September, signalling greater demand momentum. New order activity also rebounded, supported by a return to growth in export orders.
The new orders sub-index rose to 62.2 last month from 60.5 in January, firmly in expansion territory, but the increase was slower than in recent months.
Naif Al-Ghaith, Riyad Bank's chief economist said growth was driven by the services and construction sectors.
"Additionally, the upsurge in new export orders signified growing demand for domestic products from international markets and high competitiveness in local industries," he added.
The 12-month business outlook brightened in February from the previous month, helped by stronger demand projections.
Saudi Arabia's non-oil growth is expected to come in above 5% in the medium term, its finance minister said in February, slightly lower than the 6% figure previously projected.
Non-oil activities vastly outperformed the oil sector last year which slowed sharply on the back of cuts to oil production and lower prices.
(Reporting by Rachna Uppal; editing by Christina Fincher)
