Riyadh – Mubasher: Saudi Arabia’s non-oil private sector expanded modestly in October, helped by a growth in employment and new orders, according to a monthly survey of companies sponsored by Emirates NBD.
The seasonally adjusted Emirates NBD Saudi Arabia Purchasing Managers’ Index (PMI) advanced slightly to 53.8 in October from 53.4 in September. A reading above 50 indicates expansion, while a reading below that signals contraction.
Output growth in Saudi Arabia’s non-oil private sector slowed to 56.1 in October, down from 56.7 a month earlier, but new export orders recovered after easing in September, reflecting increased external demand, the survey found.
The employment index climbed to 51.3 in October compared to 50.7 in September, marking a seven-month high, but still indicating a modest rise in jobs as “only 3.1% of firms surveyed indicated they had hired more staff last month.”
Commenting on the Saudi Arabia PMI survey Khatija Haque, head of MENA Research at Emirates NBD, said, “Staff costs, a good proxy for wages, remained below the neutral 50.0 level for the second month in a row, pointing to fractional wage deflation on average in the private sector.”
Output prices slightly grew in October, breaking a three straight monthly drop. In the same vein, input costs retreated slightly last month on lower purchase costs, providing some relief for firms’ margins, the survey added.
“Business optimism about future output increased markedly in October, with nearly half of all firms surveyed expecting their output to be higher in a year’s time, while the other half expected current levels of output to be sustained,” Haque noted.
She said that the hike of oil prices to over $80 per barrel (pb) last month, the highest level since October 2014, has contributed to improving business sentiment, along with propelling the Kingdom’s government to increase budget spending in 2019.
