Dubai: Saudi Arabia’s non-oil private sector growth continued to accelerate in August supported by sharp expansions in new orders and output.

Data showed that international demand for Saudi Arabian products and services picked up, as highlighted by a renewed increase in new export orders. Growth of staffing levels was sustained during August, as companies responded to greater capacity pressures by taking on extra staff. Companies continued to face upward cost pressures, but their ability to fully pass on higher cost burdens to consumers was restricted by intensive competitive conditions. The rate of growth in inventories climbed to a record high, reflecting greater buying levels.

“Saudi Arabia’s non-oil sectors expanded at a solid rate in August, with the headline PMI broadly unchanged from July. The recovery in export orders helped boost overall new order growth to the fastest rate in four months in August, while output also showed a sharp rise last month,” said Khatija Haque, Head of MENA Research at Emirates NBD.

The headline seasonally-adjusted Emirates NBD Saudi Arabia Purchasing Managers’ Index (PMI) edged up to 55.8 in August from 55.7 in July. This was consistent with the strongest improvement in operating conditions since April. However, the headline PMI remained below its long-run average (58.1).

Although the level of positive sentiment dipped to the lowest since October 2016, firms retained positive expectations over the 12-month outlook for output. Optimism was rooted in forecasts of further improvements in market demand.

The downturn in the non-oil private sector in Egypt lost impetus in August as signalled by the PMI rising to the joint-highest mark in 23 months. Output fell at the joint-weakest rate in the current 23-month period of contraction. A fractional decline in new orders was recorded, while new export work increased markedly. Faced with lower output requirements, firms reduced both their payroll numbers and purchasing activity accordingly. The rate of input cost inflation softened during the month. Meanwhile, firms continued to pass on greater cost burdens to clients by way of increasing their selling prices.