Saudi Arabia’s Non-Oil Business Sector Shows Growth In November
The non-oil private sector of Saudi Arabia improved in November, after it experienced a slowdown for two consecutive months in September and October.
Compared to the prior months, November saw a spike and faster rates on the sector's output, new orders, purchasing activity and input stocks.
The adjusted Emirates NBD Saudi Arabia Purchasing Manager's Index showed an increased activity in the non-oil sector in November, having recorded 55.0. It rebounded from the survey-record low of 53.2 in October.
Expansion was reported to remain weak. Furthermore, cost pressures intensified, resulting to a renewed increase in charges after two successive deadlines.
Employment on most firms were unchanged, with the rate of hiring slightly picking up. Staffing levels had remained stable among 97% of the monitored firms. Subdued hiring and rising new orders resulted to some pressure on capacity, and backlogs increased for the third time in four months.
"All components of the Saudi PMI increased in November, with output and new orders rebounding strongly from October. This is consistent with other evidence showing non-oil sector activity recovering last month, following the Kingdom's first international debt issue in late October," said Khatija Haque, Head of MENA Research at Emirates NBD.
With better marketing, new businesses arose more quickly. The rise in total new work was reinforced by an improvement in foreign demand.
There was also an increased activity in the companies' purchasing due to stronger demand. Input buying was at its greatest in three months, causing the pre-production inventory building to become steeper.
The rate of growth in the total input costs was also the fastest since August. The overall increase was attributed to the solid rise in purchase prices.
The surge in this sector came as a good news as the country was reported to be struggling with its oil markets.