Business activity tracker in Gulf kingdom increases on back of rise in output and new orders
Growth of business activity in Saudi Arabia's non-oil private sector rose marginally in Febuary, a survey of more than 400 private companies has showed.
The SABB HSBC Saudi Arabia Purchasing Managers' Index, which measures activity in the manufacturing and services sectors, was 58.5 points last month compared to 58.1 points in January.
The seasonally adjusted index remains well above the 50-point mark separating growth from contraction.
It reflects the economic performance of the Saudi Arabian non-oil producing private sector companies through the monitoring of a number of variables, including output, orders, prices, stocks and employment.
Output and new order growth remained solid and employment levels continued to rise. Meanwhile, purchasing activity increased at a sharp rate, the survey said.
Non-oil producing private sector firms in Saudi Arabia reported both higher output and increased new orders in February.
While the rise in output was mainly driven by more new business and improving market conditions, the rise in new orders was attributed to marketing and sales efforts within companies.
Moreover, the rate of growth in new work was sharp and higher than in the previous survey period. New export orders also continued to increase.
Employment levels rose further during February. According to anecdotal evidence, new business was the main reason for an increase in payroll numbers.
The latest survey data pointed to higher prices charged by Saudi Arabian non-oil producing private sector companies. Increased input costs were commonly mentioned by companies that reported a rise in output prices.
Overall input prices also rose during February, and the rate of input cost inflation was broadly unchanged from January.
Around 11 percent of companies recorded higher input costs and only two percent reported a fall. While the rate of purchase price inflation picked up, wage inflation fell to a 16-month low.
Purchasing activity increased during the latest survey period with around 35 percent of panellists reporting an increase in quantity of items purchased, while less than nine percent indicated a fall.