DUBAI: Saudi Arabia’s non-oil private sector saw a further improvement in growth momentum at the start of 2017 amid reports of favourable economic conditions and improving underlying demand. The latest upturn was led by sharp increases in output and new business, with data also pointing to improved client demand across foreign markets. Employment increased only marginally, however, despite rising volumes of unfinished work. On the price front, charges rose for the third successive month amid a further increase in input costs.
“The rise in Saudi Arabia’s PMI to the highest level in 17 months is an encouraging start to the year, particularly as it reflects faster output and new order growth in January. Firms also appear to be more optimistic about the coming 12 months,” said Khatija Haque, Head of MENA Research at Emirates NBD. Volumes of incoming new business rose at the sharpest pace in 14 months in January. A number of panellists mentioned that promotional activities had resulted in sales. Another factor leading total new work to increase was a marked expansion in new export work, which reportedly occurred as firms offered internationally competitive prices.
Companies in Saudi Arabia’s non-oil private sector raised their input buying in order to cater for increased output requirements. Though weaker than the series average, the rate of expansion was sharp overall, and underpinned the fastest rate of inventory accumulation in 16 months.
