Saudi Arabia’s non-oil private sector economy continued to expand in October, with business conditions improving at the fastest pace in four years, as output and new order growth in the kingdom gathered pace, according to reports and new data.
The IHS Markit Saudi Arabia Purchasing Managers’ Index (PMI) increased to 57.8 in October 2019, the highest since August 2015, from 57.3 in the prior month. Output and new order growth quickened, with the latter rising at the sharpest rate since June. October also saw a sharp increase in purchasing activity as firms looked to bring their buying levels into line with higher output requirements and build up inventories. At the same time, export sales rose further, though at a slower rate, according to the website Trading Economics.
Purchasing Managers’ Indexes (PMI) are economic indicators derived from monthly surveys of private sector companies.
However, job growth and hiring failed to match private sector economy gains. Employment growth slowed as firms remained reluctant to take on additional staff.
The news overall is positive for Saudi Arabia, which is focused on growing its non-oil sector as part of Vision 2030, the Kingdom’s ambitious plan to diversify its crude oil-reliant economy. Vision 2030 was announced in 2016, so the recent data on the non-oil private sector economy represents a high point since the economic plan was launched, backed by Crown Prince Mohammed bin Salman and King Salman.