Growth in Saudi Arabia’s non-oil private business sector slowed in October because of competitive pressures and signs of moderating demand, although activity remained robust overall, a survey of companies showed on Tuesday.
The seasonally adjusted SABB HSBC Saudi Arabia Purchasing Managers’ Index eased to a five-month low of 59.1 points last month from 61.8 points in September, which was the highest level in over three years. A reading above 50 means growth and below that level means contraction.
Output growth fell sharply, with the subindex dropping to 64.1 points from 69.5 as new orders tumbled to 65.4 points from 70.6.
However, employment growth accelerated at the fastest pace of since September 2012, with the subindex at 54.7 points. Over 12 percent of companies said their employment rose, some were reacting to expectations for strong order growth in the future.
The hiring pushed staff cost inflation up to 54.5 points in October, its highest level since the survey was launched in August 2009, although overall input price inflation slowed slightly. Output price inflation climbed to 52.8 points, the highest since October 2012.
Backlogs of work rose rapidly, at a pace only slightly slower than September’s record increase, which was evidence of capacity constraints in Saudi Arabia’s private sector, the survey said.