Business conditions improve to the greatest extent in 3 months: Survey

Growth in the non-oil private sector picked up at the start of the third quarter on the back of sharper increases in output and new orders, according to a new survey.
The Saudi Arabia PMI survey, sponsored by Emirates NBD and produced by IHS Markit, contains original data collected from a monthly survey of business conditions in the Saudi private sector.
According to it, greater output requirements encouraged companies to purchase more inputs and stimulated job creation in the sector. Weakness was seen regarding trade, however, as new export orders fell. On the price front, input costs rose at a solid and accelerated pace. However, firms’ ability to fully pass on higher cost burdens to customers was restricted by intense market competition and charges increased only marginally.
Khatija Haque, head of MENA research at Emirates NBD, said: “Faster growth in output and new orders helped the headline PMI in Saudi Arabia rise in July, signalling the fastest rate of non-oil sector expansion in three months. Firms were more optimistic last month, and this likely contributed to increased buying activity and inventory accumulation.”
The Emirates NBD Saudi Arabia Purchasing Managers’ Index (PMI) — a composite gauge designed to give a single-figure snapshot of operating conditions in the non-oil private sector economy — rose from 54.3 in June to 55.7 in July. This was consistent with a robust improvement in overall business conditions, the strongest since April.
The main factors contributing to the upward trajectory of the non-oil private sector economy were sharper expansions in both new orders and output. Anecdotal evidence highlighted greater projects, good economic conditions, stronger underlying demand and higher construction activity.
Concurrently, June’s increase in new export orders was short-lived, with non-oil private sector companies noting a renewed contraction in July. The rate of decline was fractional, however. Panelists commented on weaker demand…

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