Dubai: Saudi Arabia’s Purchasing Managers’ Index (PMI) rose to 57.3 in September from 57 in August, indicating a sustained improvement in business conditions across Saudi Arabia’s non-oil private sector for three months.
Latest data showed output expanded at the fastest pace since December 2017, enabling firms to take on additional staff at the most marked rate in 18 months.
Output across the non-oil private sector rose sharply and the most since December 2017, buoyed by stronger underlying demand conditions according to reports from surveyed businesses.
“Output among non-oil private sector firms in Saudi Arabia grew at a sharp pace in September, with the rate of expansion quickening to the fastest since December 2017. At current levels, the PMI survey is consistent with year-on-year GDP growth of around 3 per cent as we head into the final quarter of 2019,” said Amritpal Virdee, Economist at IHS Markit.
On the price front, input cost inflation was the sharpest in one year, amid increases in both purchasing prices and staff costs.
The non-oil private sector jobs market improved markedly during September. The rate of job creation was the fastest in 18 months. Some panellists stated that they had raised their headcounts in order to improve their product quality.
September saw a renewed monthly increase in average cost burdens faced by non-oil private sector businesses.
Reflecting sharp new business growth, firms ramped up their input buying at a marked pace during September. Moreover, the rate of increase quickened to a four-month high.
Finally, business confidence towards future growth prospects was strongly optimistic during September, despite easing slightly from August. Just under 38 per cent of respondents forecast greater business activity over the coming 12 months.
“October data will provide the first opportunity to gauge the impact of the recent attacks on the critical oil processing facilities in Abaqaiq and Khurais,” said Virdee.