Dubai: Saudi Arabia’s non-oil private sector entered the final quarter of the year on a stronger footing, with business conditions improving at the fastest pace since August 2015, according to the October Purchasing Managers’ Index (PMI) data.
The headline PMI, that gives a single-figure snapshot of operating conditions in the non-oil private sector economy, rose to 57.8 in October from 57.3 in September.
“Growth momentum continued to build during October, with the headline PMI posting its highest figure since August 2015. Output and new orders expanded at faster rates, mostly driven by domestic sales,” said Amritpal Virdee, Economist at IHS Markit.
The upturn in business conditions seen in October was led by a steep and accelerated increase in new business. Export sales rose on increased demand resulted in higher overall output in October, with the rate of growth accelerating for the third month in a row to the highest since December 2017.
“There were signs of export conditions becoming more supportive, with panellists stating that they had seen an overall improvement in foreign demand conditions,” said Virdee.
October also saw a sharp increase in purchasing activity as firms looked to bring their buying levels into line with higher output requirements and build up inventories.
Confidence towards year-ahead outlook for activity ticked up in October, with around 39 per cent of survey panellists expecting an increase in output over the coming 12 months. Forecasts of greater sales were cited as the principal reason to be optimistic by firms.
Latest data showed that firms operating in Saudi Arabia’s non-oil economy remained reluctant to take on additional staff. Employment rose only modestly and at a slower pace than in September.
Firms’ overall operating expenses were little changed in October as a slight rise in purchasing costs was offset by a marginal fall in average staff pay. Firms continued price discounting last month with the objective of stimulating demand.
