Riyadh – Mubasher: The headline seasonally adjusted Purchasing Managers’ Index (PMI) of Saudi Arabia reflected a rapid expansion of the non-oil private sector during June 2023.
The PMI reading increased to 59.6 last month from 58.5 in May 2023, according to Riyad Bank’s latest data.
Both output and new orders rose at accelerated, multi-year record rates. In this regard, firms boosted their purchasing activity at the fastest pace in the survey history in order to meet higher business requirements and bolster stock.
The reports highlighted that output rose at the steepest rate since March 2015, whilst sales growth was the strongest for nearly nine years.
Firms across the Kingdom sought to bolster stocks to prepare for expected growth in the coming months, with the rate of inventory accumulation reaching a ten-month high.
The job growth was maintained, and some firms reported paying higher wages to retain experienced staff. Employment hiked to the strongest degree since August 2015, as confidence in the outlook remained positive, rising to its highest since January.
Naif Al Ghaith, Chief Economist at Riyad Bank, said: “The Kingdome’s non-oil private sector remained on a steeply upward growth trajectory by the end of the second quarter, as inflows of new business accelerated, particularly in construction and tourism activities.”
"All other components of the index were positive. Heightened demand and improved market conditions have accelerated employment growth to the highest level since August 2015 as well as purchasing activities,” Al Ghaith continued.
“Yet this economic spike may contribute to increased inflationary pressures alongside reported increases in staff and construction material costs.”
He elaborated: “Moreover, supply chains were able to cope with greater demand, as lead times improved at the sharpest rate in 13 years, which effectively capped further increases in prices charged to customers.”
"Looking ahead, positive sentiments for activity are still strong. The recent pick-up in demand and sales has improved confidence across industries and expectations of an extension of these positive trends in the coming months,” the official concluded.
