According to a survey of businesses, supported by significant increases in output and new orders, Saudi Arabia’s non-oil private sector economy grew in September, though more slowly than in August due to slower employment growth and rising operational expenses due to inflation.
The monthly reading of the seasonally adjusted S&P Global Saudi Arabia Purchasing Managers’ Index (PMI), was recorded at 56.6, compared to 57.7 in August. A rise in the readings above 50.0 indicates increased activity.
“Albeit down on August, Saudi Arabia’s non-oil private sector economy retained an impressive pace of growth during September, especially against the backdrop of increasingly challenging global economic conditions,” observed Mr. David Owen, Economist at S&P Global Market Intelligence.
Two of the key components of the PMI, output and new orders, remained firmly inside positive territory during September, again expanding at strong rates. Confidence in the quality of goods and services provided meant “firms expect to successfully convert into hard contract wins a high proportion of what is an extremely positive pipeline of new business,” Mr. Owen highlighted.
Along with the rise in production, purchasing activity increased, though it slowed to its lowest level since November 2021. Based on the data, employment increased as well, albeit at the weakest rate in the last six months. In order to maintain their competitiveness in the market, although marginally businesses boosted output prices in response to higher operating costs.
“Moreover, with costs rising at a broadly average rate, combined with a keenness amongst non-oil companies to maintain competitive pricing policies, inflationary pressures presently appear to be contained. Indeed, the latest survey showed output prices rising at a rate broadly in line with trend in September,” Mr. Owen observed.
