Job creation rate rises in KSA nonoil economy

The rate of job creation in Saudi Arabia’s nonoil producing private sector companies accelerated to the sharpest since March, according to a survey.
The Saudi British Bank (SABB) has published the results of the headline SABB/HSBC Saudi Arabia Purchasing Managers’ Index (PMI) for July 2013 — a monthly report issued by the bank and HSBC.
It reflects the economic performance of the Saudi Arabian nonoil producing private sector companies through the monitoring of a number of variables, including output, orders, prices, stocks and employment.
At 56.6 in July, unchanged from June, the headline PMI signaled a further improvement in overall operating conditions in Saudi Arabia’s nonoil producing private sector economy.
However, the rate of improvement was low considering the historical data.
Output increased further in July, but the rate of expansion decelerated for the third month running.
Nevertheless, the overall expansion remained sharp, with 24 percent of companies reporting activity growth.
New order intakes also rose solidly, with study participants linking the increase to improving sales team efforts and good economic conditions.
The rate of expansion was up slightly, while demand from export markets rose at a slowest pace.
Driven by increased new business, workforce numbers and levels of unfinished work rose in July.
While the rate of job creation accelerated to the sharpest since March, backlogs of work accumulated at the slowest pace in four months. Concurrently, vendor performance improved, as faster delivery times had been agreed with suppliers to meet business requirements.
Around 7 percent of respondents reported better delivery times, while only 1 percent indicated a worsening.
Overall input prices in Saudi Arabia’s nonoil producing private sector increased further in July, with the rate of cost increases broadly unchanged from the previous month. Survey respondents linked higher purchase prices to general economic pressures and increased raw material prices.
While input costs continued to rise, nonoil producing private sector companies in Saudi Arabia lowered their charges for the first time since last August, albeit only marginally.
Increased market competition was the primary factor for the fall in selling prices, according to study panelists
Buying activity in Saudi Arabia’s nonoil producing private sector increased markedly in July, with 32 percent of companies acquiring additional raw materials and semi-finished goods.
Respondents often attributed an increase in purchasing activity to higher business.
Stocks of purchases accumulated at the fastest pace in four months in July, with 12 percent of companies reporting increased holdings of inputs.