Saudi non-oil private sector growth reaches its highest level in 7 years

Saudi Gazette report

RIYAD – According to a survey by the Information Processing Services (IHS) Market. IHS Markit is a global information provider.

A purchasing managers index compiled by IHS Markit rose to 58.6 in September from 54.1 the previous month, the largest monthly point gain on record. The 4.5 point increase represents the biggest improvement in non-oil sector conditions since August 2015.

Companies increased production at the fastest pace since May 2021 and new orders surged, causing its sub-index to rise ten points on a monthly basis.

The acceleration was mainly attributed to faster growth in new orders. New businesses have grown at the fastest rate in seven years due to increased demand from domestic customers. Growth in new orders from overseas was moderate compared to local growth.

The expansion of production accelerated for the first time in four months. Employment figures have seen only a marginal increase, but the pace of job creation has been the fastest since June, the survey found.

“After two successive drops, the latest reading showed that the economic recovery has stamina and that easing pandemic measures will trigger new waves of demand,” said David Owen, economist at IHS Markit.

“Still, product prices rose only slightly in September, reflecting companies’ fears that they could be excluded from a competitive market. Overall cost pressures have remained modest so far, but could intensify if rising commodity prices spill over to other sectors of the economy, ”he added.

Saudi Arabia, the world’s largest oil exporter, forecasts economic growth of 2.6% this year and 7.5% in 2022, after contracting 4.1% last year due to the coronavirus crisis and a record drop in oil prices.

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