RIYADH
\nSaudi Arabia\u2019s economy showed healthy improvement in the non-oil private sector in January, driven by strong business activity and new orders, an economic tracker showed.
\nThe Kingdom\u2019s Purchasing Managers\u2019 Index stood at 55.4 in January, indicating economic expansion, as it is above 50. However, in comparison to December\u2019s 57.5, there is a decline, attributed to softened expansion rates due to inflationary pressures and increasing purchasing costs, as per the Riyad Bank Saudi Arabia PMI report by S&P Global.
\nNaif Al-Ghaith, chief economist at Riyad Bank, commented in the report: \u201cIn recent assessments of the Saudi Purchasing Managers\u2019 Index, it\u2019s clear that the non-oil economy has continued to grow, despite challenges stemming from rising costs and interest rates. This resilience underscores the diversification efforts within the Saudi economy.\u201d
\nAs per the report, rising purchasing costs were driven by inflationary pressures arising from increased demand for inputs and higher material prices, coupled with escalating supply chain risks. Nevertheless, competitive forces compelled companies to refrain from raising their fees.
\nThe economist explained that this implies businesses are absorbing certain cost pressures rather than transferring them to consumers, potentially reflecting a strategy to retain market share in a competitive environment.
\nThe report also linked the significant increase in purchase prices, the most pronounced since May 2012, to escalating shipping costs likely influenced by supply chain risks amid the Red Sea crisis. Coupled with a substantial rise in staff costs, this contributed to the highest level of input price inflation since August 2020.
\nThis prompted companies to moderate procurement activities due to diminishing demand conditions, resulting in the rate of purchasing growth reaching an eight-month low. The report mentioned a slight increase in staffing, resulting in backlogs of work within the non-oil sector. Al-Ghaith also connected the backlog growth to a rise in the construction sector in the Kingdom, likely associated with ongoing infrastructure projects and real estate development. \u201cThis expansion not only points to economic growth but also signifies a positive outlook for the construction industry in Saudi Arabia, potentially indicating a period of sustained expansion and investment in the sector,\u201d the economist commented.<\/p>\n","protected":false},"excerpt":{"rendered":"
RIYADH Saudi Arabia\u2019s economy showed healthy improvement in the non-oil private sector in January, driven by strong business activity and new orders, an economic tracker showed. The Kingdom\u2019s Purchasing Managers\u2019 Index stood at 55.4 in January, indicating economic expansion, as it is above 50. However, in comparison to December\u2019s 57.5, there is a decline, attributed […]<\/p>\n","protected":false},"author":2,"featured_media":385567,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-385547","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business"},"yoast_head":"\n