Business conditions in Saudi Arabia’s non-oil private sector economy improved at its fastest pace for six months in October, a survey showed on Tuesday.
The pick-up in pace was largely due to an increase in sales, which supported further expansions in business activity, employment, purchasing activity and stocks.
The seasonally adjusted Riyad Bank Saudi Arabia Purchasing Managers’ Index (PMI) rose for the third month in a row in October, rising to 56.9 from 56.3 in September, according to the survey.
The PMI is a weighted average of the following five indices: New Orders (30 per cent), Output (25 per cent), Employment (20 per cent), Suppliers’ Delivery Times (15 per cent) and Stocks of Purchases (10 per cent).
“Over 40 per cent of surveyed companies reported a surge in demand, spurred by robust domestic client interest, creative marketing strategies, and continuous infrastructure investments,” said Naif Al-Ghaith, Chief Economist at Riyad Bank.
With this ongoing expansion, the non-oil sector’s contribution is projected to exceed 52 per cent of the overall GDP, he added.
However, the month saw increases in material costs and wages with the rate of salary inflation particularly marked.
This led to total input price inflation rising to its sharpest pace since the beginning of the year.
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