Business activity tracker falls marginally from six-month high in January
Business activity growth levels in Saudi Arabia's private sector slipped slightly in February, a new purchasing managers' survey has shown.
The Saudi British Bank (SABB) HSBC Saudi Arabia Purchasing Managers' Index (PMI), which measures the performance of the kingdom's manufacturing and services sectors, edged down to 59.6 last month from 60.0 the previous month.
The PMI indicated that business conditions in the kingdom's non-oil private sector saw marked expansions in new orders and activity, as well as accelerated growth of both employment and stocks of purchases.
The improvement in the health of the economy was accompanied by faster input price inflation as demand for inputs strengthened, the PMI said.
Receipts of new work continued to grow in February, and at a marked rate, as respondents reported further improvements to market conditions, it added.
The latest data also indicated that demand from domestic clients remained a key driver of sales.
Nevertheless, new export orders rose at the strongest rate for seven months, with a number of panellists attributing the increase to targeted marketing strategies.
New business growth also encouraged Saudi Arabian non-oil private sector companies to increase their output in February. The rate of expansion was sharp and only slightly slower than January's seven-month high.
Backlogs of work were accumulated over the month, however, as the rate of new order growth exceeded that of activity.
To keep up with rising new order levels, companies increased purchasing, built up stocks and took on additional staff in February.
The rate of job creation was solid and quickened to an eight-survey period high, as many panellists also noted the impact of Saudization policies.
Stronger demand did have implications for cost pressures, the PMI showed, as overall input price inflation accelerated to a near series record-high.
Data showed that escalating purchasing costs remained the principal force behind the rise in input prices, with panellists noting higher costs from fuel to food stuffs.
In contrast, salary inflation slowed to a four month-low, signalling only a modest increase in wage costs.