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SABB/HSBC PMI Index: Output growth accelerates to five-month high in September

Saudi Arabia: Thursday, October 03 - 2013 @ 00:00

It reflects the economic performance of the Saudi Arabian non-oil producing private sector companies through the monitoring of a number of variables, including output, orders, prices, stocks and employment.

Following a trend observed throughout the 50-month survey history, operating conditions in Saudi Arabia’s non-oil producing private sector improved in September. The headline PMI registered a six-month high of 58.7, up from August’s 57.5.

September data signalled a further rise in output levels at Saudi Arabian non-oil producing private sector firms, with the rate of expansion accelerating to a five-month high. Order book volumes also rose at a faster pace, driven mainly by higher construction business, increased sales efforts and improved market conditions.

Client demand from foreign markets strengthened substantially in September, with the growth rate of new export business accelerating to the fastest in the study’s history. Anecdotal evidence suggested that the rise in new export orders was mainly linked to good market conditions.

The latest survey results signalled a further increase in input costs in Saudi Arabia’s non-oil producing private sector. The rate of overall cost increase was broadly unchanged from August, and in line with the study’s average. Purchase prices rose at a faster pace, as companies faced a higher market demand for some items. Staff costs, on the other hand, increased at the weakest rate since April. Where higher wages were reported, study participants linked this to increased living costs and performance based pay rises.

In response to increased input costs, Saudi Arabia’s non-oil producing private sector companies raised their selling prices in September. The rise in charges followed a two-month period of price discounting.

Employment levels in Saudi Arabia’s non-oil producing private sector rose further in September, extending the current sequence of job creation to 24 months. The latest hiring of workers was attributed to increased workloads.

Driven by higher levels of new business, backlogs of work accumulated for the eighth consecutive month in September. The rate of backlog accumulation eased slightly since August, but was above the study average. Meanwhile, suppliers’ delivery times shortened further. The latest improvement in vendor performance was the sharpest since April.

In line with the trends for output and new orders, purchasing activity increased in September. The rate of growth was sharp, although the slowest in four months. Meanwhile, stocks of purchases accumulated at the fastest pace since March.

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Thursday, October 3- 2013 @ 0:00 UAE local time (GMT+4) Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Mediaquest FZ LLC.

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