Saudi business activity grew at the highest rate since the beginning of the Coronavirus pandemic, according to the Purchasing Managers’ Index (PMI).
Another strong expansion in the non-oil private sector occurred during the month of November, the IHS Markit index group said.
Business activity rose at one of the fastest rates since the start of the pandemic. Companies experienced strong demand and modest price pressures.
Saudi business activity
However, the slowdown in new business growth made the overall improvement in economic conditions the least since August, the group’s report issued on Sunday said.
The Purchasing Managers’ Index in Saudi Arabia scored 56.9 points in November, indicating a sharp improvement in the conditions of the non-oil private sector economy.
Although it fell from 57.7 points in October and hit a three-month low, the index was in line with the 12-year average.
The new orders index, the largest component of the core PMI, fell for the second month in a row after hitting a seven-year high in September.
Nevertheless, the index continued to point to a strong recovery in new business volumes, which was stronger than most of the recovery since the first coronavirus shutdown.
Many members of the study committee linked the increase in sales to a return to normal economic conditions and an improvement in the tourism sector through easing travel procedures.
External demand also improved with new export orders rising to the highest level since May.
As a result, business activity in the non-oil private sector rose sharply in the middle of the last quarter. And the growth rate was slightly weaker than October’s highest level in four years.
While production was strong enough to ensure backlogs were reduced, the rate of backlog decline was the slowest since the pandemic began. Companies indicated demand pressures were beginning to pressure overall capacity.
The increase in production led companies to make further expansions in hiring and purchasing.
Employee numbers also rose at the fastest rate since June, albeit only marginally. Many companies remained cautious about their future sales outlook.
At the same time, purchases rose at a sharp pace in light of efforts to increase stocks of production inputs in the face of global supply chain disruptions.
However, local suppliers in particular succeeded in avoiding supply issues and reducing delivery times for the third month in a row.