Dubai – Business News Report|| The non-oil private sector in Saudi Arabia continued its expansion trajectory during October, marking the seventh consecutive month of growth. This development occurred alongside an acceleration in commercial activity and improved production levels, even as the purchasing managers index declined to 54 points from 55.3 points in September. According to data from the Riyad Bank survey released by S&P Global, the main seasonally adjusted indicator remained above the neutral 50-point threshold, signaling sustained improvement in operating conditions across the non-oil segment.
Production and Demand Dynamics
Data revealed that production growth accelerated to a strong pace compared to the previous month. This surge was supported by better underlying demand and intensified sales and marketing efforts by companies. New orders also continued to rise, albeit at a slower rate than in September, remaining below the historical series average. Growth in demand relied primarily on the local market, while export orders fell for the eighth consecutive month at an faster pace.
Supply Chain and Employment Trends
Companies participating in the survey reported that shipping disruptions, higher transport and insurance costs, and competitive market conditions negatively impacted external sales. Approximately one-quarter of firms noted a decline in export orders during October. In the labor market, businesses increased their workforce for the fourth straight month, though hiring rates were modest and slower than in September. Uncompleted work volumes rose slightly for the second consecutive period due to increased sales and supplier delivery delays.
Rising Input Costs and Pricing Strategies
Supply chain delivery times showed only limited improvement, representing the weakest performance since April. Persistent maritime disruptions affected delivery operations, prompting some firms to rely more heavily on local sources for production inputs. Meanwhile, cost pressures intensified with the start of the final quarter. Company purchase prices rose at the fastest pace in six months, driven by higher shipping, insurance, raw material, and energy costs. Employee cost inflation also accelerated to its quickest pace since February.
Economic Outlook and Expert Commentary
Despite rising input costs, the rate of selling price increases slowed to a nine-month low. Companies offered greater discounts amid stiff competition, although prices continued to rise strongly. Naif Al-Ghaith, chief economist at Riyad Bank, stated that the non-oil private sector demonstrated resilience in October. He attributed this to sustainable domestic demand, improved commercial activity, and continued employment expansion. Al-Ghaith noted that maintaining the index above 50 reflects ongoing operational improvements. He added that accelerating production highlights the ability of Saudi firms to respond to local demand through operational efficiency and marketing initiatives.
This story was produced in the newsroom from the disclosed sources named above.
