Dubai: Saudi Arabai’s Purchasing Managers’ Index (PMI) data for October signalled a strong start to the final quarter of 2017 for non-oil private sector.
The PMI rose to 55.6 in October, up from 55.5 in September. This indicated a steep expansion in Saudi Arabia’s non-oil private sector.
Sharp growth of both output and new orders contributed to latest improvement in operating conditions. On the price front, an uptick in cost pressures was recorded, which according to anecdotal evidence led to higher selling prices. Business confidence improved during October, prompting firms to increase stocks of purchases at a record rate in anticipation of further improvements in economic conditions.
“The headline PMI index for Saudi Arabia has been broadly stable for the last four months, at a level which suggests solid growth in the non-oil sector. Encouragingly, firms were much more optimistic in October than they were in September, which bodes well for growth in the final quarter of this year,” said Khatija Haque, head of Mena Research at Emirates NBD,
Incoming new business grew at a steep rate during October. The upturn in demand for Saudi-produced goods and services led to sharp growth in output, according to anecdotal evidence. That said, the rate of expansion eased from what it was in the preceding survey period.
Non-oil private sector companies in Saudi Arabia continued to employ additional staff during October. Optimism towards future growth prospects reached a five-month high in October. Better marketing campaigns, business investments and an expected improvements in economic conditions underpinned the latest rise in confidence.
October data indicated a marginal uptick in average cost burdens, linked to a rise in raw material costs.
Egypt data improves
The latest data indicated that the downturn in the Egyptian non-oil private sector softened in October. Contractions in output, new orders and employment all eased.
Meanwhile, business confidence hit a 26-month high, signalling strong optimism towards future growth prospects, with many expecting economic stability over the coming year. Furthermore, both output and input price inflation softened.
At 48.4 in October, the headline seasonally adjusted PMI rose from 47.4 in September. Deteriorating business conditions in the Egyptian non-oil private sector have been recorded in every survey since October 2015. That said, the most recent contraction was muted in comparison to the historical average.
The most recent survey indicated that output continued to decline in the Egyptian non-oil private sector, albeit at a slower pace than in September.
On the price front, October’s survey recorded a downtick in both input and output price inflation.