Riyadh – Mubasher: Output growth in the Saudi Arabia non-oil private sector economy grew in October for the second straight month, while new business expanded more slowly than in September amid weak export volumes and a further impact from the COVID-19 pandemic on corporate spending.

The headline seasonally adjusted IHS Markit Saudi Arabia Purchasing Managers’ Index (PMI) rose slightly to 51.0 in October, from 50.7 in September, the highest reading for eight months.

The upturn in the headline PMI was backed by a stronger rise in output across the non-oil private sector, with growth accelerating to the quickest since February. Firms seeing higher activity often ascribed this to higher sales, new contracts, and the resumption of some projects.

In contrast, the overall rate of demand growth softened to just a marginal pace in October, partially due to a renewed fall in exports as firms struggled to revive orders with foreign clients.

Latest data indicated a slight decline in business confidence that was the first recorded since June, fuelling an eighth successive reduction in job numbers, albeit one that was only marginal.

Meanwhile, input prices rose modestly at the start of the fourth quarter. The inflation rate picked up from the previous month and, despite remaining slower than August's recent high, was the second-sharpest for over two years.

"While the latest PMI data indicated a further expansion in the Saudi Arabia non-oil private sector in October, there were reasons for fresh concern about the pace of recovery from the COVID-19 outbreak," said Economist at IHS Markit, David Owen. 

"Many businesses are hopeful that growth will strengthen in the coming 12 months, but there remains a high number of firms uncertain that markets can be fully revived with COVID-19 infections still prevalent around the world,” added Owen.