Saudi private sector growth slows in September

The Saudi non-oil private sector showed signs of growth in September but performance worsened slightly compared to the previous month, according to Dubai bank Emirates NBD.

The bank’s purchasing managers index, produced by IHS Markit, showed sharp expansions in output and new orders but also a decrease in input price inflation.

Firms were also seen to be reducing their output charges to increase competitiveness, while employment grew only marginally but extended the current sequence of job creation to 42 months.

The PMI score for the month edged down to 55.5 from 55.8 in August and stood below the long-run average.

Emirates NBD said the pace of output growth remained strong but was slower than the historical average and growth in new orders softened slightly.

Output prices also fell for the first time since May with anecdotal evidence suggesting firms had reduced selling prices to remain competitive.

Meanwhile, the rate of output inflation eased to the lowest level for three months.

Vendor performance was seen improving to the greatest extent since January 2010 and there was also an increase in business confidence even if overall sentiment remained below the long-run average.

The latest report followed the release of government data on Saturday that indicated the economy as a whole slipped into recession in the second quarter

Gross domestic product, adjusted for inflation, shrank 2.3 per cent from the previous quarter in the April-June period, after dropping 3.8 per cent in the first quarter.

Read: Saudi Arabia enters recession in Q2