Business activity in Saudi Arabia’s non-oil economy expanded at the fastest pace in more than seven years, booming to an extent unseen since the kingdom embarked on a sweeping effort to reduce its reliance on crude.
New order growth quickened in November to a 14-month high, and companies had the most optimistic expectations for the year ahead since January 2021, according to a survey of purchasing managers compiled by S&P Global and published on Monday.
The Riyad Bank Saudi PMI rose for the second straight month to 58.5 from 57.2 in October. It was the highest reading since September 2021, remaining well above the 50-mark separating growth from contraction.
“The Saudi economy is continuing its expansion in the non-oil sector in November,” Naif Al-Ghaith, chief economist at Riyad Bank, said in a report. “Business conditions have improved across the board in light of rising demand.”
The buoyancy of the non-oil private sector -- the engine of job creation for the world’s top crude exporter -- reflects the strength of the economic momentum after the pandemic that’s so far been largely immune to a sharp uptick in the cost of money at home and the threat of a slowdown globally. Saudi Arabia is already on track to be the fastest growing major economy this year.
The pace of sales growth in November was the sharpest in over a year, with companies seeing the quickest increase in new export business since November 2015. Output was sharply on the rise in sectors ranging from manufacturing to services.
Alongside the pickup in activity, inflation is proving more persistent than anticipated, with average input costs and prices charged rising the most since July. Most firms also opted to keep staffing unchanged from October, with employment numbers up “only slightly,” according to the report.
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