The private sector in Saudi Arabia gathered pace in August. The non-oil private sector expanded during the month at its fastest growth rate since October 2021.
Business activity has been boosted by improving demand conditions, according to the seasonally adjusted S&P Global Saudi Arabia Purchasing Managers’ Index (PMI).
The index for the whole economy climbed to 57.7 in August from 56.3 in July, breaking above the series average since 2009 of 56.8. Readings above 50.0 indicate an expansion in activity.
Economists noted that the PMI pointed to added resilience in the non-oil economy during August, as business activity and sales continued to rise sharply despite reports of mounting global economic distress.
Total new orders rose at the quickest pace since October 2021, driven by improving client demand, higher exports, and a broad recovery in economic conditions since the Covid pandemic.
There was a strong increase in new export orders, which fuelled the rise in new orders. There was also a rise in employment levels in the Kingdom, making it the fifth consecutive month. The UAE PMI also continued to trend higher in August, reaching a 38-month high of 56.7.
Economists said this signals a robust improvement in business conditions in the non-oil economy of the Gulf nation.
Surveyed businesses said the growth was due to a sharper uplift in new order volumes in August. Sales growth was the second-fastest in over three years, as businesses witnessed improved demand and increased price promotions.
The non-oil private sector in the UAE also saw a notable slump in input costs, driven by lower fuel prices. This helped to ease the burden for businesses.
The data offers hope for other countries struggling with persistent inflation, although concerns remain that global energy supply constraints will continue to push prices higher, economists said.
Saudi Arabia is the biggest economy in the Arab nations.
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