Khaberni - A survey today, Monday, showed that the non-oil private sector in Saudi Arabia remained in the growth zone in December, despite the pace of expansion slowing to its lowest level in 4 months.
The index also showed a continued slowdown in the growth of new orders during the past month.
The seasonally adjusted Riyadh Bank Purchasing Managers’ Index in Saudi Arabia fell to 57.4 in December from 58.5 in November, indicating a slowdown in growth for the second consecutive month. Despite this slowdown, the main reading of the Purchasing Managers’ Index was slightly stronger than its long-term average of 56.9.
PMI readings above 50.0 indicate growth in activity, while readings below that mark contraction.
Output levels in non-oil companies rose sharply, driven by increases in new business, ongoing projects, and increased investment spending. However, the growth rate was the least pronounced since August.
The sub-index for new orders fell to 61.8 in December from a November reading of 64.6, but the pace of expansion was the slowest in four months. Companies pointed to improved economic conditions and successful marketing campaigns as main drivers, but expressed concerns about market saturation.
Naif Al-Ghaith, chief economist at Riyadh Bank said, "The demand for exports showed a marginal increase for the fifth consecutive month, but the latest rise was the weakest in this sequence, suggesting that external demand remains supportive but uneven."
He added "Overall, demand conditions generally indicate resilience rather than acceleration as companies deal with a more competitive environment."
Employment growth remained strong, with companies continuing to expand their workforce. However, inflationary pressures intensified, with the costs of production inputs rising sharply due to higher purchasing costs, leading to increased production prices.
Company sentiment for the coming year is expected to be lukewarm due to concerns about increasing competition in the market, with only moderate expectations for future growth.
