Business activity in Saudi Arabia grew at the fastest pace since the beginning of the year in November, fuelled by a sharp rise in sales and strengthening sentiment.
Non-oil private sector activity in the kingdom rose to the highest level since January, according to IHS Markit’s Purchasing Managers’ Index. The gauge was well above the 50 mark that separates growth from contraction.
While it is welcome news, there is still catching up to do in order to overcome the coronavirus slowdown, the report said.
Concerns that the virus may flare up again still cloud the outlook. Meanwhile, employment figures returned to growth last month, though “only fractionally overall,” according to the report.
The Saudi PMI “pointed to an economy getting back on its feet in November,” wrote David Owen, economist at IHS Markit. “However, most of the key series remain off their trend level, hinting at a continued gap between the economy’s current conditions and its pre-Covid momentum.”
The Saudi PMI rose to 54.7 from 51 in October, the strongest improvement since January.
An increase in new work and better market conditions were highlighted in the report, while both domestic and foreign sales rose, marking only the second upturn in new export orders since February. Business confidence also rose to its highest mark in 10 months, as companies were encouraged by an easing in lockdown measures and news about effective vaccines. There were more private sector investments along with efforts to raise inventories, the report said, while cautioning that some firms delayed payments to suppliers as cash flow was still weak and there were reports of low raw material supply leading to increased cost pressures.
The rate of input price inflation increased from October and was one of the steepest in the last five years, the report also noted.
Source:https://www.arabianbusiness.com/politics-economics/455404-saudi-private-sector-rebounds-in-november-as-growth-hits-2020-high