Saudi Arabia’s non-oil private sector winded up 2017 with a steep development in business conditions, as per the adjusted Emirates NBD Saudi Arabia Purchasing Manager’s Index.
The index – a composite gauge developed to provide a single-figure snapshot of operating conditions in the non-oil private sector economy – fell fractionally to 57.3 during December, from 57.5. All together, however, the recent figure displayed that expansion stayed steep and above 2017’s average.
In addition, non-oil private sector companies in Saudi Arabia proceeded to announce steep rates of expansion in results, with anecdotal evidence suggesting that domestic demands and an rise in orders from neighbouring countries has contributed to larger output needs.
Inflows of new business to Saudi non-oil private sector companies were also found to have risen in the course of December. While the extension was steep, it stayed below the historical average, as per Emirates NBD.
New export orders also extended at the rapid rate from August, which expanded the present sequence of growth to five months. In addition , non-oil private sector firms proceeded to hire more staff in December, although at a slower rate than the series’ long-run average.
Average cost burdens in Saudi Arabia were found to have increased sharply during August, and high demand for raw materials led to larger prices. Despite increasing input costs, selling prices only increased at a fractional pace overall amid competitive pressures in the non-oil private sector.
On a negative note, business confidence towards future growth prospects was found to have reduced slight, even while remaining generally optimistic. An upturn in business conditions and hiked marketing activity were predicted to underpin output growth in the upcoming year.
Head of MENA research at Emirates NBD, Khatija Haque stated, “The December PMI survey continued to show a strong rate of expansion in December, and the data suggests that non-oil growth accelerated in the final quarter of 2017, as well as for the year as a whole compared to 2016.”
He even said, “Nevertheless, we expect headline GDP growth to be close to zero in 2017 as substantial oil production cuts will offset the expansion in the non-oil sectors of the economy. We are more optimistic about growth prospects in 2018 however.”
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