Kuwait businesses see fastest new order surge in 15 months

Dubai: Kuwait’s non-oil private sector gathered fresh momentum in February, with new orders expanding at the fastest pace in 15 months and output growth accelerating in response to stronger demand.

The S&P Global Kuwait Purchasing Managers’ Index rose to 54.5 in February from 53.0 in January, extending the current expansion streak to 18 months and marking the strongest overall improvement in operating conditions since November 2024. Any reading above 50 signals growth.

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New orders drove the upswing, rising at the quickest pace since late 2024. Export demand also improved, adding to domestic gains. Companies cited competitive pricing, improved product quality and successful marketing campaigns as central to winning new business.

Business activity followed suit, expanding at a 10-month high as firms worked to meet stronger sales pipelines. Purchasing activity surged in tandem, rising at a 15-month high and posting one of the fastest increases recorded in the survey’s history. Input inventories climbed markedly as companies sought to avoid shortages while demand remained elevated.

Andrew Harker, Economics Director at S&P Global Market Intelligence, said growth momentum strengthened as firms continued to secure new contracts.

“Growth momentum strengthened in Kuwait's non-oil private sector in February as companies were again successful in securing new business.”

Despite rising demand, hiring remained modest. Employment increased for the twelfth consecutive month, yet the pace of job creation was unchanged from January and insufficient to absorb the surge in new work. Backlogs of orders rose for the third month in a row, hitting a fresh series record.

Harker said capacity constraints are emerging as a key challenge.

“The main issue facing firms at present is being able to grow workforce numbers quickly enough to keep up with workloads. With backlogs rising at a fresh record pace for three months in a row now, fulfilling customer requirements in a timely manner is becoming more difficult, although companies did expand their purchasing activity at a near-record pace in February to help make sure the necessary materials are available going forward.”

Supplier performance offered some relief. Delivery times shortened at the sharpest pace since July 2020, supported by competitive pressures among vendors and positive responses to urgent requests.

Input cost inflation climbed to a nine-month high, driven by increases in purchase prices and staff expenses. Respondents pointed to rising costs linked to maintenance, marketing, materials, printing, rent, salaries and spare parts. Some firms raised selling prices in response, yet overall charge inflation remained modest as competition continued to restrain pricing power.

The balance between cost pressures and competitive pricing remains central to maintaining order growth. Firms appear willing to absorb part of the cost increase to defend market share while expanding volumes.

Looking ahead, business confidence strengthened to a 26-month high, with companies expecting further output gains over the coming year. Product diversification, sustained competitive pricing and customer service improvements were cited as drivers of optimism.

Harker said the current market proposition is resonating with clients.

“In any case, the offer that Kuwaiti firms are making to clients at present is clearly working, and with business confidence rising we can expect further growth in the months ahead.”