Saudi non-oil private sector growth hits 27-month high: Survey

November data signalled a strong upturn in the Saudi non-oil private sector. Steep output and new order expansions contributed to the latest positive result, according to the latest Saudi Arabia PMI survey.
Meanwhile, foreign demand improved at a modest pace and job creation continued. On the price front, cost burdens rose moderately, while output prices were unchanged since October amid strong competition in the sector.
Business confidence remained positive, albeit the level of sentiment fell slightly since the preceding survey.
The survey, sponsored by Emirates NBD and produced by IHS Markit, contains original data collected from a monthly survey of business conditions in the Saudi private sector.
Khatija Haque, head of MENA research at Emirates NBD, said: “The strong November PMI reading is encouraging ... and indicates that it was largely ‘business as usual’ last month. That output and new orders continued to increase sharply bodes well for non-oil sector growth in the fourth quarter. Higher oil prices likely contributed to the broadly positive business sentiment.”
The headline seasonally adjusted Emirates NBD Saudi Arabia Purchasing Managers’ Index (PMI) — a composite gauge designed to give a single-figure snapshot of operating conditions in the non-oil private sector economy — rose to 57.5 in November, from 55.6 in October.
This figure indicated the steepest improvement in the non-oil private sector since August 2015.
Output continued to increase, in line with the survey’s trend. The rate of growth was sharp overall and accelerated to a 10-month high in November. According to anecdotal evidence, the upturn in business activity was supported by strong domestic demand.
Growth of new business accelerated during November, with the respective index hitting a 27-month high. The improvement in new work inflows was reported by 37 percent of respondents.
New export order growth reached a three-month high during November. Non-oil private sector firms commonly linked the rise in new orders from abroad to an economic upturn in neighboring countries.
Job creation continued in November, thereby extending the current sequence of hiring to 44 months.