Source: Arab News
The Saudi British Bank (SABB) has published the results of the headline SABB HSBC Saudi Arabia Purchasing Managers’ Index (PMI) for October 2011 – a monthly report issued by the bank and HSBC. It reflects the economic performance of Saudi Arabian nonoil producing private sector companies and establishments through the monitoring of a number of variables, including output, new orders, exports, input prices, output prices, quantity of purchases, stocks and employment.
After a relatively subdued September, PMI data showed in October an improved trend. Reflecting improvements in its key components, the PMI registered 56.7 in October (up slightly from September’s upwardly-revised series low of 56.3), and signaled a stronger gain in the health of Saudi Arabia’s nonoil private sector.
Boosted by better market conditions and advertising campaigns, demand for Saudi Arabian nonoil private sector goods and services rose in October, supporting a sharper rise in total new orders. New export business also increased at a faster rate than in September. Consequently, companies stepped up their activity levels, purchased additional inputs and raised inventories. Output and buying activity growth rates were robust but below average. The corresponding increase in stocks was much more modest, reflecting largely sufficient holdings at many companies.
Despite stronger growth of new business, firms largely kept on top of their workloads in October, as shown by a marginal rise in backlogs and broadly no-change in employment levels. Workload management was aided by a further improvement in average vendor performance – lead times shortened to the greatest extent for one-and-a-half years.
October’s price indicators pointed to only a fractional rise in input cost pressures and a further easing in charge inflation to a series record low. Both purchase prices and staff costs rose more sharply during the latest survey period, which panelists respectively linked to higher raw material prices and better company performance. Meanwhile, selling prices rose only modestly as the vast majority of monitored firms maintained their tariffs since September.