Survey shows that higher oil production has boosted activity in related manufacturing sectors
Growth in Saudi Arabia's non-oil private sector rose to a five-month high in August, buoyed by the impact of increasing oil production, a survey of businesses showed on Thursday.
The seasonally adjusted Emirates NBD Saudi Arabia Purchasing Managers' Index climbed to 58.7 points last month from 57.7 in July. The 50-point level separates expansion from contraction.
Saudi Arabia has raised its oil output to record highs in the last few months to protect its market share, although global oil prices plunged to six-year lows in August.
Khatija Haque, head of regional research at Emirates NBD, said the oil price slide since June did not seem to be hurting non-oil business activity in the country, while higher oil production had apparently boosted activity in related manufacturing sectors that were included in the PMI survey.
"We expect Saudi Arabia to maintain high levels of oil output regardless of the price, which should continue to underpin activity in the non-oil sectors through the rest of this year," she said.
Output growth in the PMI survey accelerated to 65.8 points in August from 65.1 in July, while new order growth picked up to 64.8 from 63.1. Employment growth rose sharply to 53.3 points.
Output prices fell for the first time in four months, with the index hitting 49.7 points, while input price inflation was positive but slowed.