https://arab.news/v4nah
- The new report business activity rose “at one of the fastest rates since the start of the COVID-19 pandemic”
DUBAI: Strong demand and modest price pressures are pushing business activity to rise in Saudi Arabia, a latest IHS Market report showed, indicating a “strong growth momentum” for the Kingdom’s non-oil sector.
The new Purchasing Managers’ Index report said business activity rose “at one of the fastest rates since the start of the COVID-19 pandemic.”
This is despite the index dropping from 57.7 in October to 56.9 in November, which the report still said was “in line with the average recorded over the 12-year series.”
The fall was due to a slowdown in new orders, which fell for the second month in a row from September’s seven-year high.
Output was strong enough to ensure a reduction in backlogs of work, however the rate of depletion was the slowest recorded since the start of the pandemic.
Staff numbers picked up at the quickest rate since June, albeit still only marginally as many firms remained cautious about future sales forecasts. Purchases meanwhile rose at a sharp pace as companies made efforts to build input stocks in the face of global supply chain disruption.
Local vendors managed to avoid supply problems and reduced their delivery times for the third month running.
Cost pressures faced by non-oil companies remained modest in November, with the rate of inflation edging down for the first time since August. Higher prices were mostly linked to an increase in raw material costs, as well as higher shipping and fuel prices.
The outlook for the coming year weakened to a three-month low in November, in line with a softening of new business growth. The degree of optimism was also far lower than pre-COVID trends, as many companies remained cautious about the strength of the economic recovery and possible future waves of the virus.
“Despite slipping to a three-month low, new business growth was rapid overall, whilst activity expanded at one of the quickest rates since the start of the pandemic,” David Owen, an economist at the IHS Markit said.