Saudi's strong non-oil growth in February may signal new economic era for KSA
Saudi Arabia’s non-oil private sector companies recorded solid growth in February with output, new orders, and employment all continuing to rise, said a report.
However, the growth rates were a little softer, said the Saudi British Bank (SABB) HSBC Saudi Arabia Purchasing Managers’ Index (PMI) for February.
The SABB HSBC index reflects the economic performance of Saudi Arabian non-oil producing private sector companies through monitoring a number of variables, including output, orders, prices, stocks and employment.
Latest data showed that output continued to rise during February, supported by ongoing increases in new orders.
The rates of expansions remained sharp, albeit lower than the survey averages.
Majority of the respondents agreed that the economic conditions remained supportive for conducting and securing new business, both at home and abroad, said the SABB HSBC study.
February’s results showed that export orders strengthened during the latest survey period, with the rate of growth accelerating to the sharpest for four months.
A number of companies responded to increased workloads and sustained growth in new business by adding to their payrolls.
Latest data showed that staffing levels increased for the twenty-ninth successive month. February’s net gain in staffing levels was, however, the slowest recorded in recent months.
According to SABB, higher business requirements also encouraged higher purchasing activity in February.
"Growth was sharp, as companies not only sought to service current projects but also to build stock in anticipation of continued growth," it stated.
Latest data showed that inventories of purchases rose to the greatest degree for 11 months.
In spite of continued growth of demand for inputs, suppliers to Saudi Arabia’s non-oil private sector economy were again able to exceed average delivery times compared to a month ago.
SABB/HSBC study participants commented that vendors improved their performance in response to demands for faster deliveries.
Finally, on the price front, SABB study said output prices were raised at a modest, but accelerated pace in February.
The rate of price increase was the sharpest recorded in a year as companies responded to further rises in average input prices.
Overall input costs continued to rise at a marked pace, albeit one that was the slowest for seven months.
"Purchase price increase was slightly softer, while average salaries rose to the weakest degree since last September. Where wages were increased, it was to mainly compensate," the report added.