Saudi Arabia: Non-oil economy shows robust growth in November but job creation mild
The increase in business activity in the sector was its highest since 2015
Riyadh: The non-oil economy in the kingdom recorded a robust November, the Saudi Arabia PMI survey results from Riyad Bank for the month showed. The survey also showed that expansion in business activity in the sector was at its fastest in seven years.
However, the sector did face the pressures of global inflation, the report added.
Naif Al-Ghaith PhD, Chief Economist at Riyad Bank, said: "The Saudi Economy is continuing its expansion in the non-oil sector in November, business conditions have improved across the board in light of rising demand. Output levels have expanded at the fastest pace in seven years, driving cost pressures higher and resulting in increased prices charged to consumers. Improved business expectations was also observed as a result of the ongoing execution of Vision 2030 initiatives, which provided confidence to the outlook of future output of the non-oil activities."
New order growth accelerated to a 14-month high, leading to a sharper rise in purchasing activity and this could be attributed to improving economic conditions, rising client demand and increased investment. However, the growth in activity didn't translate to a dramatic increase in new jobs, owing to falling backlogs and strong capacity levels.
Staffing remained largely unchanged for most companies, with firms reporting a renewed rise in staff costs in November.
Inflationary pressures also led to an increase in output costs for customers in manufacturing, wholesale and retail, and service sectors. Construction was the only vertical which recorded lower output costs.
Along with new orders, 41 per cent of the surveyed businesses recorded an uptick in the rate of sales growth compared to October. New export business also showed growth, at the fastest rate since November 2015. These numbers contributed to what the report said is the most positive outlook for the year since the beginning of 2021.
Vision 2030 initiatives and the rise in new orders marked a positive sentiment in the industry, the report added.