Saudi Arabia’s non-oil private sector experienced slower growth in October, as new business activity expanded at a reduced pace and corporate confidence remained subdued amid geopolitical uncertainties and rising operating costs.
Although output growth improved compared with September, it remained below the sector’s historical average. Businesses attributed the increase in activity to stronger underlying demand, improved sales and increased marketing efforts.
The seasonally adjusted Riyad Bank Saudi Arabia Purchasing Managers’ Index (PMI) declined to 54.0 in October from 55.3 in September. Despite the fall, the latest reading represented the second-highest level since February.
Domestic demand continued to support business activity, while export orders recorded a sharp decline. Surveyed companies pointed to shipping disruptions, rising freight and insurance expenses, and intensified market competition as key factors behind the weaker export performance.
Rising logistical and operational expenses also contributed to inflationary pressures. Input costs increased at their fastest pace in six months, while the rate of increase in selling prices eased to its lowest level in nine months.
Employment continued to expand for the fourth consecutive month, although the pace of recruitment slowed compared with September.
Meanwhile, ongoing geopolitical uncertainty continued to affect business sentiment. Companies remained only mildly optimistic about future output, with confidence levels staying below the historical average.
Click here for more on Business
