Survey shows non-oil private sector steadily growing

A survey sponsored by Emirates NBD and produced by IHS Markit showed that following October’s record low, growth of the Saudi Arabian non-oil private sector strengthened again in December. Output rose at the sharpest rate since August, while new orders increased at a marked, albeit slightly slower, rate. Companies responded to increased requirements by raising their purchasing activity and boosting inventories amid positive growth projections.
However, with the rate of expansion in new work remaining below its long-run trend, staffing levels continued to increase only slightly.
The survey used original data collected from a monthly survey of business conditions in the Saudi private sector.
Commenting on the survey, Khatija Haque, head of MENA Research at Emirates NBD, said: “Improving demand was a key driver for output and new order growth in Saudi Arabia in December, which is very encouraging as we look forward to 2017. While firms increased purchases and accumulated inventory in anticipation of future orders, they were reluctant to boost hiring. Overall, the pace of non-oil private sector growth this year, as indicated by the Purchasing Managers’ Index (PMI) survey, was markedly lower than 2015.”
The headline seasonally adjusted Emirates NBD Saudi Arabia PMI — a composite gauge designed to give a single-figure snapshot of operating conditions in the non-oil private sector economy — improved to a level of 55.5 during December, up from November’s 55.0 and the best reading since August. December’s PMI was indicative of a further marked improvement in overall operating conditions.
Underpinning overall growth was an acceleration in the rate of expansion of output to a four-month high. Latest data marked the second month in a row that production growth has risen following the record low pace of expansion seen in October. With production and order book requirements rising, there was a similarly marked increase in purchasing activity in December.

Source: Arab News