Saudi Arabia’s non-oil business activity surges to four-month high
Saudi Arabia’s non-oil business activity surges to four-month high
Growth in non-oil business activity in Saudi Arabia accelerated for a second consecutive month in October, a survey showed on Sunday, with new orders supporting an overall expansion in activity which led to a sharp rise in employment levels.
The seasonally adjusted Riyad Bank Saudi Arabia Purchasing Managers’ Index rose to 58.4 in October from 57.2 in September – far above the 50 mark denoting growth and the highest reading since June.
New business expanded faster with the new orders subindex surging to 66.1 in October, also a four-month high, from 64.2 the previous month.
Saudi Arabia’s non-oil business activity surges to four-month high
- Factors behind this performance
One of the driving factors behind this performance has been the surge in new orders, which has played a pivotal role in sustaining the growth momentum. The new orders subindex spiked to 66.1 in October, marking a four-month high and showcasing a significant improvement from the previous month’s 64.2.
The positive impact of this surge in new business has been witnessed across various sectors, including manufacturing and construction. Although the growth in output remained strong, the subindex eased slightly to 60.1, which, while slightly below the long-term trend.
Reuters quoted Naif Al-Ghaith, the chief economist at Riyad Bank, as saying, “The surge in new orders signifies an expanding market and suggests that the non-oil sector is experiencing sustained growth and demand for its products.”
This is a promising sign for the Saudi economy, indicating a growing demand for labour and potential improvements in the job market, as reflected by the rise in the employment subindex.
In October, the employment subindex reached a nine-year high of 54.5, up from 52.0 in September. This surge in employment is in line with the government’s plan towards creating more job opportunities for its citizens, a key element of Vision 2030, an ambitious economic diversification plan spearheaded by Crown Prince Mohammed bin Salman. The plan aims to reduce the nation’s dependence on oil and create a more diverse and sustainable economy.
(With inputs from Reuters)