Riyadh – Mubasher: Saudi Arabia’s non-oil private sector continued to expand in June on the back of slightly faster new work growth, according to a report compiled by IHS Market for Emirates NBD.

The seasonally adjusted Emirates NBD Saudi Arabia Purchasing Managers' Index (PMI) advanced to 57.4 in June, the highest since November 2017, up from 57.3 in May. A reading above 50 indicates expansion, while a reading below that signals contraction.

“The June survey data showed little change from May’s readings, with the headline PMI only marginally higher on the back of slightly faster new work growth.   While both output and new work increased at a solid rate in June, there was almost no change in private sector employment,” Khatija Haque, head of MENA Research at Emirates NBD, commented.

Haque added that firms operating in the kingdom’s non-oil private sector remained upbeat about future output, although this component of the survey declined to the lowest level since August 2018, possibly reflecting the region’s heightened geopolitical tension.

At the other end of the spectrum, output growth in Saudi Arabia’s non-oil private sector slowed to a three-month low during June. However, the rate of expansion remained sharp and was broadly in line with the long-run series average, the report said.

The report said that new businesses witnessed the fastest growth in three months in June. Moreover, inflows of new orders from abroad increased for the fourth month in a row.

In the same vein, Saudi non-oil private sector’s businesses expanded their payroll numbers during in the prior month, while the rate of job creation was marginal and slowed from May’s four-month high, the report found.

“June saw a second consecutive monthly rise in average cost burdens faced by non-oil private sector businesses. Despite this, the rate of inflation was fractional and eased from May. Anecdotal evidence from respondents indicated that price competition among suppliers had acted as a restraint on cost burdens,” the report highlighted.

However, firms operating in the GCC nation’s non-oil private sector scaled up their input buying at a marked pace during June.

The report highlighted that confidence among non-oil private sector firms towards future growth prospects remained optimistic during June due to the impact of forthcoming business investment and new project wins.