Saudi September Non-Oil Business Growth Fastest In Over 3 Years

Non-oil private business activity in Saudi Arabia grew at the fastest pace in over three years last month, buoyed by strong expansions in new orders and employment, a survey showed on Tuesday.

The SABB HSBC Saudi Arabia Purchasing Managers’ Index climbed to a seasonally adjusted 61.8 points in September, its highest level since June 2011, from 60.7 points in August, remaining far above the 50 line denoting growth.

Output growth hit its highest level since March 2011 while new orders expanded at their fastest pace since May 2012. Construction was a major source of demand growth, companies responding to the survey said.

The survey suggested that the short-term negative impact of labour reforms on the economy might be fading; employment growth rose to 53.9 points, its highest level since December 2012. Measures to push more Saudi citizens into private sector jobs have made it harder and more costly to hire foreign workers.

Growth in new orders produced the fastest increase in backlogs of work since the survey was launched in August 2009.

The survey showed only moderate inflationary pressure, however. Overall input price inflation edged down to 54.2 points from 54.7 points, while output price inflation eased to 50.9 points from 51.3 points.