DUBAI – Saudi Arabia’s non-oil private sector notched a 14th month of consecutive growth in October as output expanded at the fastest rate since December 2017, signalling the sector’s continued strengthening, a survey showed on Wednesday.
The seasonally adjusted IHS Markit Saudi Arabia Purchasing Managers’ Index (PMI) fell to 57.7 in October from 58.6 in September but remained well above the 50.0 mark that separates growth from contraction.
It was also above the series average of 56.9 and with the exception of the September reading was the fastest pace of growth since November 2019. The output sub-index rose to 62.1 in October from 61.2 in November.
“October PMI data showed the non-oil sector recovering at a rapid pace. Growth in output was the strongest seen for nearly four years, driven by a marked rise in client demand as the lifting of COVID-19 restrictions continued to boost economic activity,” said David Owen, economist at survey compiler IHS Markit.
“New order growth ticked down from September’s recent high but remained strong, particularly compared to those seen since the start of the pandemic.”
Non-oil private firms in Saudi Arabia continued to have a positive outlook for future business, with hopes pinned on expectations of further improvement in demand. The sentiment was the second highest of the year but slightly weaker than in September and still below the series average since April 2012.
“The rate of purchase cost inflation sharpened during October, giving further signs that rising commodity prices are feeding through to firms’ balance sheets. With confidence towards sales prospects running strong, businesses were able to pass on costs to customers with the quickest rise in output prices since August 2020,” Owen said.
The vast majority of survey responds reported no change to their workforce, marking only marginal growth in the employment sub-index that was slower than in September, though employment expanded for the seventh consecutive month.
(Reporting by Yousef Saba; Editing by Catherine Evans)
