JEDDAH — Saudi Arabia’s non-oil private sector economy keeps on expanding with output new orders and employment steadily on the rise but the “the growth rates were a little softer”, the Saudi British Bank (SABB) said on Wednesday.
SABB said in its new monthly report it issued in tandem with the Hongkong Shanghai Banking Corp (HSBC) that latest data showed the Kingdom’s output continued to rise in February, supported by ongoing increases in new orders.
The report titled “SABB HSBC Saudi Arabia Purchasing Managers’ Index for February 2014 reflected the economic performance of Saudi Arabian non-oil producing private sector companies through monitoring a number of variables, including output, orders, prices, stocks and employment.
“February data indicated the continued expansion of Saudi Arabia’s non-oil private sector economy, with output, new orders, and employment all continuing to rise. However, growth rates were a little softer,” it said. “Latest data showed that output continued to rise during February, supported by ongoing increases in new orders. Rates of expansions remained sharp, albeit lower than the survey averages,” it added.
The study participants commented that economic conditions remained supportive for conducting and securing new business, both at home and abroad.
“February’s study results showed that export orders strengthened during the latest survey period, with the rate of growth accelerating to the sharpest for four months.”
A number of companies, the report said, responded to increased workloads and sustained growth in new business by adding to their payrolls. Latest data showed that staffing levels increased for the twenty-ninth successive month. February’s net gain in staffing levels was, however, the slowest recorded in recent months.
Higher business requirements also encouraged higher purchasing activity in February. Growth was sharp, as companies not only sought to service current projects but also to build stock in anticipation of continued growth.
Latest data showed that inventories of purchases rose to the greatest degree for 11 months.
In spite of continued growth of demand for inputs, suppliers to Saudi Arabia’s non-oil private sector economy were again able to exceed average delivery times compared to a month ago, the report said.
SABB/HSBC study participants commented that vendors improved their performance in response to demands for faster deliveries.
On the price front, output prices were raised at a modest, but accelerated pace in February. The rate of price increase was the sharpest recorded in a year as companies responded to further rises in average input prices.
Overall input costs continued to rise at a marked pace, albeit one that was the slowest for seven months. Purchase price increase was slightly softer, while average salaries rose to the weakest degree since last September. Where wages were increased, it was to mainly compensate. — SG