Riyadh – Mubasher: Saudi Arabia’s non-oil private sector witnessed stronger improvement in economic conditions in August, a report by IHS Markit said on Tuesday.
The seasonally adjusted Emirates NBD Saudi Arabia Purchasing Managers' Index (PMI) rose to 57.0 points in August, from 56.6 points in July.
This brought the headline index closer to its long-run survey average of 57.6 points.
"August PMI data for Saudi Arabia revealed a stronger improvement in economic conditions and when combined with the relatively solid expansion seen in July, should help support a faster quarter-on-quarter expansion for the third quarter of 2019,” Amritpal Virdee, Economist at IHS Markit, commented.
The upturn in business conditions seen in August was led by a slight quickening of overall new order growth.
As for export sales, they levelled up solidly, though at a slower pace than in July.
Accordingly, domestic markets were the main impetus for the inflows of new business.
“A bright spot was a quickening of both output and overall new order growth, which outweighed weaker job creation and helped improve overall business conditions at a faster rate,” Virdee added.
Moreover, purchasing activity across the non-oil private sector saw a stronger increase, as firms sought to bring their buying levels into line with higher output requirements and build up inventories.
"Business margins were provided with some relief with a welcome fall in input costs. Furthermore, the survey's forward-looking gauge, the Future Output Index, rose to a three-month high on the back of new product initiatives and positive forecasts for underlying demand,” Virdee said.
IHS Markit’s recent survey showed that firms operating in Saudi Arabia's non-oil economy remained reluctant to take on additional staff, adding that employment rose only fractionally and at the slowest pace since April.
Operating expenses retreated for the fourth time in the past eight months, amid decreases in both average staff pay and purchasing costs.
However, confidence towards the outlook for activity over 2020 strengthened in August, with the overall degree of optimism ticking up to a three-month high.
