Saudi Arabia's non-oil private sector economy grows at fastest pace in three months
Employment in the kingdom's private sector grew to an 18-month high in September
The non-oil private sector economy of Saudi Arabia expanded at the fastest pace in three months in September on the back of continued growth in new orders from both domestic and foreign markets.
The headline seasonally adjusted Purchasing Managers’ Index – a gauge designed to give a single-figure snapshot of operating conditions in the kingdom's non-oil private sector economy – rose to 57.3 in September from 57 in August, signalling a sustained improvement in growth momentum in the Arab world's biggest economy.
The non-oil private sector jobs market improved markedly in September and the rate of job creation was the fastest in 18 months, with some of the panelists raising their headcounts in order to improve product quality.
“At current levels, the PMI survey is consistent with year-on-year gross domestic product growth of around 3 per cent as we head into the final quarter of 2019," Amritpal Virdee, an economist at IHS Markit, said. "[The] non-oil private sector firms sought to add to their payrolls at the most marked pace in 18 months, buoyed by efforts to improve the quality of product offerings.”
Output across the non-oil private sector rose sharply and the most since December 2017, buoyed by stronger underlying demand conditions according to the businesses surveyed for the study.
The rate of growth of new export orders quickened from August at a solid pace. Anecdotal evidence from panelists indicated an overall improvement in foreign demand conditions during September. Backlogs of work across the non-oil private sector also increased for the first time since June.
Business confidence and optimism towards future growth prospects remained strong during September, despite easing slightly from August. Just under 38 per cent the of respondents forecast greater business activity over the next 12 months. Anecdotal evidence also suggested that firms were optimistic towards the impact of forthcoming business investment and new project wins.
"Domestic demand, underpinned by government spending ... is driving growth in the kingdom’s non-oil sectors," Khatija Haque - head of MENA research at Emirates NBD said in a note on Thursday.
Updated: October 3, 2019 11:17 AM