Growth in Saudi Arabia's non-oil private sector accelerated in December for a second straight month after the government paid some of its debts to the private sector, a survey of companies showed on Wednesday. The seasonally adjusted Emirates NBD Saudi Arabia Purchasing Managers' Index rose to 55.5 last month from 55.0 in November. A level above 50 means business is expanding.
Saudi private-sector growth slowed during much of 2016 because of state austerity measures in response to low oil prices. But it has been picking up since the government raised $17.5 billion in an international bond issue in October and began making tens of billions of dollars worth of delayed payments to private companies. "Improving demand was a key driver for output and new order growth in Saudi Arabia in December, which is very encouraging as we look forward to 2017," said Khatija Haque, head of regional research at Emirates NBD. "While firms increased purchases and accumulated inventory in anticipation of future orders, they were reluctant to boost hiring."
Output growth rose to a four-month high of 63.3 in December from 60.3 in November, but growth in new orders edged down to 58.9 from 59.1. Employment growth also slowed, to a 12-month low of 50.4. Output price inflation picked up slightly last month while input price inflation slowed.
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