RIYADH: Saudi Arabia’s Purchasing Managers’ Index rose for the second consecutive month in October, increasing to 58.4 from 57.2 in September, driven by robust business conditions within the Kingdom, as reported by an economic tracker.
The Riyad Bank Saudi Arabia PMI report, compiled by S&P Global, revealed that in the last month, the Kingdom experienced its highest employment rate in the non-oil private sector since October 2014.
Naif Al-Ghaith, chief economist at Riyad Bank, said: “In October, the Riyad Bank PMI surged to 58.4, indicating robust growth in the non-oil sector. This positive development was primarily driven by the significant rise in employment levels, reflecting increased hiring activity and a boost to the workforce.”
He added: “The employment expansion is a promising sign for the Saudi economy, as it suggests a growing demand for labor and a potential improvement in the job market.”
Companies participating in the PMI survey expressed high confidence regarding future business activity, driven by increasing demand and strong order pipelines.
The report also highlighted a sharp increase in new order intakes during October, with the rate of expansion reaching a four-month high.
“Another contributing factor to the expanded PMI was the strong growth in new orders, which reached the highest level since June. This indicates a renewed sense of confidence among businesses and a willingness to invest in new projects,” added Al-Ghaith.
He noted that the surge in new orders signifies sustained growth in Saudi Arabia’s non-oil sector, with rising demand for products in this division.
Strengthening the non-oil sector is crucial for the Kingdom, as it aligns with the goals outlined in Vision 2030 and the diversification of the economy away from oil.
“Overall, the October PMI bodes well for the Saudi economy, suggesting that the non-oil sector is playing a significant role in driving growth, which we expect to record above 6 percent for this year,” said Al-Ghaith.
The PMI report stated that selling prices of goods and services declined in October.
“This decline can be attributed to intense competition within the market, as firms strive to maintain their market share by keeping prices competitive. While this may impact profit margins, it benefits consumers by providing them with more affordable products and contributing to overall price stability,” added Al-Ghaith.