Non-oil sector growth in Saudi Arabia rises to 5-month high

Growth in Saudi Arabia's non-oil private sector rose to a five-month high in August as new orders picked up, a survey of businesses showed on Thursday.

The seasonally adjusted Emirates NBD Saudi Arabia Purchasing Managers' Index climbed to 58.7 points last month from 57.7 in July.

“Increased oil production in the kingdom has likely boosted activity in the related manufacturing sectors, which would be included in the PMI survey,” said Khatija Haque, head of MENA research at Emirates NBD.

The kingdom is projected to maintain high oil output regardless of price, which should continue to support activity in the non-oil sectors till year-end, she added.

Both new orders and business activity readings are well above the neutral 50-level, signaling very strong growth.

Export orders accelerated last month but at a slower pace compared to July. Employment also rose thanks to higher order growth, with the pace of hiring at its fastest since March.

Input costs increased at a slower pace month-on-month, while output prices saw a very slight decline in August, on increased competition.

The PMI is based on data compiled from replies to questionnaires sent to respondents in 400 companies in manufacturing, services, construction, and other non-oil sectors and measures performance based on output, orders, prices, stocks, and employment.

The 50-point level separates expansion from contraction.