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Non-oil business activity in the Kingdom hit a six-month high in October, driven by stronger sales and renewed confidence across the board, according to the Riyad Bank Saudi Arabia PMI (pdf). The seasonally-adjusted headline figure inched up to 56.9 from 56.3 in September, remaining well above the 50.0 mark that separates growth from contraction.
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IN CONTEXT- This is the third consecutive month Saudi’s PMI figure has been on the up, and is “exactly aligned with its long-run average,” according to the report. “With this ongoing expansion, the non-oil sector’s contribution is projected to exceed 52% of the overall GDP and grow beyond 4% in 2024,” Riyad Bank Chief Economist Naif Al Ghaith said.
New orders grew at their fastest pace since March: The uptick in private sector activity was mainly driven by a surge in new orders, which grew at its fastest clip in eight months. The sub-index for new orders — the most heavily-weighted PMI component — jumped to 62.5 in October, up from 59.3 the previous month, Reuters reports.
What the pundits said: “Over 40% of surveyed companies reported a surge in demand, spurred by robust domestic client interest, creative marketing strategies, and continuous infrastructure investments,” Al Gaith said, referring to government initiatives under Vision 2030 coupled with private sector engagement.
Output + purchasing activity: The output sub-index climbed to 60.2 last month, up from 59.7 in September, according to the business newswire. Businesses ramped up activity with all major sectors experiencing growth. As a result, companies reported quicker increases in production, and purchasing activity responding to heightened demand and an optimistic outlook for future activity.
The job market logged gains too, with employment climbing for the sixth month in a row, although job creation slowed slightly. Although the construction sector saw staffing cutbacks, the overall hiring trend maintained its upward trajectory, keeping workloads manageable, according to the report.
The caveat: October saw selling prices rise for the first time in four months, driven by an uptick in input costs due to higher material prices and wages. The rise was most notable in manufacturing and retail though competition kept prices somewhat in check across the construction and services sectors.
FROM THE REGION-
- Egypt’s non-oil private sector activity marginally improved to 49 (pdf) in October, up from 48.8 in September, as strong cost pressures continue to beef up selling prices.
- The UAE’s headline PMI rose to 54.1 in October, up from 53.8 in September, signaling an improvement while remaining below the readings of 1H 2024.
