Saudi Arabia’s non-oil activity maintains growth in December: Saudi Arabia’s headline Purchasing Managers’ Index (PMI) remained unchanged from November at 57.5 last month on the back of a surge in new orders, according to Riyadh Bank Saudi Arabia’s PMI (pdf). The rally in demand edged firms to adopt bolder pricing strategies and boosted firms’ purchasing. On the flip side, employment growth eased, registering only modest growth after October’s nine-year high.
REMEMBER- The all-important 50.0 mark is the threshold separating contraction from growth. Anything over 50 denotes expansion and anything below indicates contraction. KSA’s PMI has tracked above 50 for over three years.
New orders hit a six-months high: New orders achieved their highest level in six months due to a boost in business activity and exports.New orders rose to 68.3 in December, the highest rate since June, up from 66.3 in the previous month, while output remained flat at 61. Export orders saw their strongest rally since July on the back of government initiatives and access to new markets, Chief Economist at Riyad Bank Naif Al-Ghaith said in a comment to the PMI report.
Firms bought more inputs to cover increased orders: The increase in inputs purchasing drove up stocks, which accumulated at a faster rate than in November.
Supplier delivery time saw a sharp drop: Businesses benefited from a sharp fall in supplier delivery times, with the drop being among the most profound recorded in the survey’s 14-year history.
Bumper demand meant that firms could charge higher prices: Selling charges increased for the second consecutive month in a turnaround from previous months which had seen competition rein in prices. Boosted demand gave firms the confidence to carry over higher input costs to customers.
KSA’s non-oil firms are upbeat about the coming year: Firms have high hopes for 2024, with most expecting that new orders will continue to roll in. Nevertheless, there was a slight dip in sentiment for December when compared to the yearly trend.
Looking for UAE, Egypt, Qatar, and Lebanon’s PMIs? The survey will be out tomorrow here, and you can find our coverage in our issue next week.