By Andy Sambidge
New Saudi British Bank survey says confidence among non-oil companies unaffected by turmoil
Non-oil companies operating in Saudi Arabia have not been affected by the turmoil seen in other parts of the Middle East and Africa, according to a Saudi British Bank index.
The Saudi Arabia Purchasing Managers' Index (PMI) for April showed there was little evidence that the unrest had hit the performance of firms at the start of Q2.
The index, which reflects the economic performance of Saudi Arabian non-oil private sector companies, indicated slower rates of expansion in output and new business since March, but they remained above their respective series trends.
Firms demonstrated their confidence in current and future business conditions by taking on new staff and stock building, the index said.
However, input price inflation accelerated to a series record high and global instabilities contributed to rising purchasing costs.
Almost unmoved from March's reading of 62.8, the headline PMI posted 62.7 in April.
Although it was the lowest for four months, the latest reading was still above the series trend and signalled another marked improvement in operating conditions across the non-oil private sector.
New business rose strongly during the latest survey period, while respondents commented on improved economic conditions and more business from the government.
Data suggested that the domestic market remained the main driver of new order growth.
Saudi Arabia's non-oil private sector firms raised output during April but the rate of growth was the mildest for six months, the index added.
A combination of greater market demand, pipeline delays due to the crisis in Japan and backlogs at the country's ports led to a faster build up of outstanding business for the country's non-oil private sector firms in April.
Companies raised both employment and purchases in April in order to keep up with rising business requirements with job creation the most marked since December 2009.
To protect profit margins from rising input costs, firms increased their tariffs in April. Charge inflation was the sharpest for almost a year, the index said.