Saudi Arabia’s non-oil private sector companies recorded further growth of new business in July
Saudi Arabia’s non-oil private sector companies recorded further growth of new business in July, while new work from abroad rose at an unprecedented rate, said a report. However, the rate of expansion slowed noticeably from June’s near-record high to a nine-month low, despite a faster increase in new export business, said the Saudi British Bank ‘Sabb’ HSBC Saudi Arabia Purchasing Managers’ Index (PMI) for July. Respondents to the ban’s survey linked the rise in new business was linked to favourable market conditions, good demand and new product launches. The report reflects the economic performance of Saudi Arabian non-oil producing private sector companies and establishments through the monitoring of a number of variables, including output, new orders, exports, input prices, output prices, quantity of purchases, stocks and employment.
PMI data signalled a sharp slowdown in the rate of expansion of Saudi Arabia’s non-oil private sector economy at the start of Q3. Noticeably weaker rises were recorded in both output and new orders, while job creation also moderated. Reflecting this, the headline seasonally adjusted Sabb HSBC Saudi Arabia PMI registered a 10-month low of 60.0 (down from 62.8 in June). Nevertheless, the PMI remained comfortably above the neutral mark of 50.0, suggesting that business conditions continued to improve at a marked pace, said the report. In line with a weaker trend in new order growth, output rose at a much slower pace during July. Nevertheless, activity continued to expand at a robust pace. Medium-sized firms registered a stronger increase in output than small or large companies.
Unfinished business continued to accumulate during July. However, the rate of increase remained only marginal and much weaker than the average for the past year, according to the report. To manage current workloads and company expansions, as well as to comply with the government’s new Nitaqat system, firms recruited additional workers in July. Employment rose solidly, but at a milder rate than in the previous four months. Buying activity increased at a much slower rate in July, reflecting an easing trend in new order growth. Input stocks continued to rise solidly, the report said.