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Saudi Arabia’s non-oil sector growth highest since September 2021 as PMI hits 58.5

Output prices rose in the manufacturing, wholesale & retail and services sectors (shutterstock)
Output prices rose in the manufacturing, wholesale & retail and services sectors (shutterstock)
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06 Dec 2022 02:12:11 GMT9
06 Dec 2022 02:12:11 GMT9

RIYADH: Saudi Arabia’s Purchasing Managers’ Index hit 58.5 in November — the strongest level since September 2021 — as the Kingdom’s non-oil private sector continues to expand amid rising inflationary pressure, according to a report.

The latest Riyad Bank Saudi Arabia PMI report noted that the Kingdom has maintained growth in the non-oil private sector for the 27th consecutive month.

In October, Saudi Arabia’s PMI was 57.2, while in September, it was 56.6.

According to the index, released by S&P Global, readings above the 50 mark show growth, while those below 50 signal contraction.

“The Saudi economy (continued) its expansion in the non-oil sector in November, business conditions have improved across the board in light of rising demand,” said Naif Al-Ghaith, chief economist at Riyad Bank.

Al-Ghaith added that output levels in the Kingdom’s non-oil sector have expanded at the fastest rate in seven years, driving cost pressures higher, and resulting in increased prices charged to customers.

He added: “Improved business expectations were also observed as a result of the ongoing execution of Vision 2030 initiatives, which provided confidence to the outlook of the future output of the non-oil activities.”

According to the report, the rate of sales growth of non-oil companies picked up by the sharpest level in over a year in November, as over 41 percent of surveyed businesses reported an increase from the prior month.

The report further noted that these companies saw the quickest rise in new export business since November 2015, due to strong domestic conditions.

The PMI report also hinted at the uptick in input cost inflation during November, with average input prices rising sharply and at the quickest pace since July.

“The faster pace of cost inflation led to a solid and quicker increase in output charges, as firms looked to pass through higher expenses to their customers,” the report added.

The report further pointed out that output prices rose in the manufacturing, wholesale & retail and services sectors, while it fell in the construction industry.

According to the report, job creation in the non-oil sector was very mild in November, as most of the firms kept staffing unchanged.

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