Riyadh – Mubasher: The growth of Saudi Arabia’s non-oil private sector has picked up at the start of the third quarter of 2017 on increases in output and new orders, while new export orders fell, according to the Purchasing Managers' Index (PMI).
The survey, sponsored by Emirates NBD and produced by IHS Markit, revealed that higher output requirements pushed companies to buy more inputs and consequently, pushed up job creation.
Input costs increased at an accelerated pace, but could not be passed on to consumers due to market competition, leading final product prices to only marginally go up.
The headline PMI for the Kingdom went up to 55.7 in July, compared to 54.3 in June, as business conditions improved overall; however, the performance was weaker than the index’s long-term trend, while input cost inflation quickened fastest since April.
“Faster growth in output and new orders helped the headline PMI in Saudi Arabia rise in July, signaling the fastest rate of non-oil sector expansion in three months,” head of MENA Research at Emirates NBD Khatija Haque stated, adding that “firms were more optimistic last month, and this likely contributed to increased buying activity and inventory accumulation.”
The report explained that “underlying data provided evidence of ongoing pressures on operating capacity as backlogs rose for the ninth consecutive month. Subsequently, firms increased their payroll numbers, but only marginally.”
Business confidence improved in July due to forecasts of a better economic scenario and promotional activity.
