DUBAI: The pace of growth in Saudi Arabia’s non-oil sector recovered slightly in August from the previous month’s more than two-year low, a survey showed on Tuesday, supported by a pickup in new orders and jobs.
The seasonally adjusted Riyad Bank Saudi Arabia Purchasing Managers’ Index rose to 54.8 in August from 54.4 in July - which was the lowest reading since January 2022 - but remained well below its long run average of 56.9.
The output subindex eased to 58.1 in August from 58.6 the previous month, indicating a slowing of activity among non-oil private sector businesses, leading some to reduce their selling prices to spur demand.
There was a slight uplift in new order growth in August with the subindex rising to 56.8 from 55.7 in July, while jobs growth accelerated last month to its highest reading since October 2023.
“Employment growth has been a key driver of this momentum in August, signalling those businesses are increasingly confident in their expansion plans,” said Naif Al-Ghaith, chief economist at Riyad Bank.
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“The uptick in new orders illustrates the sector’s capacity to meet growing market needs. These positive indicators, coupled with a significant rise in future output expectations, highlight strong business optimism within the private sector,” Ghaith added. Confidence among firms about the 12-month business outlook recovered in August to the highest level in five months.
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