Nonoil private sector firm supbeat on new business

Nonoil producing private sector companies in Saudi Arabia indicated a third successive monthly increase in levels of outstanding business in April, according to a report from the Saudi British Bank (SABB) and HSBC. Increased new orders was cited as the main reason for the rise in work-in-hand, said the monthly report. SABB has published the results of the headline SABB/HSBC Saudi Arabia Purchasing Managers’ Index (PMI) for April 2013. 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. April data suggested a further improvement in operating conditions in Saudi Arabia’s nonoil producing private sector, as the headline PMI posted 58.0, down slightly from 58.9 in March. While the latest survey data marked the lowest reading in five months, the rate of improvement remained sharp. Output levels continued to increase at a solid pace in April, with 31 percent of respondents indicating a rise in production. Panelists linked the expansion to improving market conditions and increased incoming new business. Driven by improved marketing efforts, order book volumes rose during the latest survey period. The rate of growth moderated slightly from March, but remained sharp. New business from abroad also rose at a slightly weaker rate than in the previous survey period. Vendor performance also improved at the sharpest rate in four months. Overall input costs continued to increase during the latest survey period, but the rate of cost inflation eased slightly from March. While an increase in purchase prices was driven by general inflationary pressures, average staff costs were broadly unchanged from the previous month. Output prices charged by Saudi Arabian nonoil producing private sector companies rose moderately in April, as the majority of respondents indicated unchanged charges from the previous month. Where higher charges were reported, panelists commonly commented on increased input costs. Purchasing activity increased further during April, as 35 percent of companies recorded a rise in the quantity of inputs purchased. According to anecdotal evidence, the rise was encouraged by increased incoming new business volumes. Input stocks at Saudi Arabian nonoil producing private sector companies rose last month as companies predicted growth of incoming new business and production requirements. Source: ArabNews