Saudi private sector growth edges down in September

Latest business survey reveals robust performance with output, new orders strengthening
Saudi private sector growth edges down in September
(HASSAN AMMAR/AFP/Getty Images - for illustrative purposes only)
By Staff writer
Tue 03 Oct 2017 01:23 PM

Growth in Saudi Arabia's non-oil private sector edged down in September but remained strong due to sharp expansions in output and new orders, according to a new business survey.

Data from the Emirates NBD Purchasing Managers' Index (PMI) also showed that input price inflation continued to soften last month.

Moreover, firms generally reduced their output charges to increase competitiveness while employment continued to increase, albeit only marginally.

The headline seasonally adjusted PMI edged down from 55.8 in August to 55.5 in September. Although the reading continued to signal a sharp improvement in the health of the sector, the headline PMI continued to score below the long-run average.
 
Khatija Haque, head of MENA Research at Emirates NBD, said: “The PMI for Saudi Arabia has been relatively stable in Q3, signalling a solid expansion in non-oil sector growth last quarter.  

"While output and new order growth has remained strong, external demand was softer compared to a year ago, as was employment growth. The announcement of key reforms and a successful $12 billion debt issue in late September should have a positive impact on both sentiment and business activity in the coming weeks.” 
 
The survey showed employment growth across Saudi Arabia’s non-oil private sector remained slight overall and matched that recorded in August. The increase extended the current sequence of job creation to 42 months. Companies that noted an increase in payroll numbers linked this to rising output requirements.
 
Output prices fell for the first time since May at the end of the third quarter. That said, the rate of reduction was marginal overall. Anecdotal evidence suggested that firms reduced selling prices in order to remain competitive. Meanwhile, the rate of input price inflation eased to the lowest for three months in September.
 
Business confidence ticked up in the latest survey. Many firms noted that they anticipate an economic upturn in the next 12 months. However, the overall level of positive sentiment remained well below the long-run average.

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