Business conditions in Saudi Arabia’s non-oil private sector in April remained at their highest level since the end of 2017, with strong growth in output and new orders despite competitive market, Emirates NBD said in its latest survey.
The headline seasonally adjusted Emirates NBD purchasing managers index for Saudi Arabia – a composite indicator designed to give an overall picture of conditions in the kingdom's non-oil private sector economy – stayed at 56.8 for the second consecutive month in April, at its highest level since the end of 2017.
The kingdom saw a “robust” increase in business activity, with the rate of growth quickening for the fourth month in a row to the fastest since December 2017, according to the Emirates NBD tracker. Companies that reported higher output in April, typically, linked this to stronger underlying demand and an associated rise in new business, it added.
However, the non-oil private sector jobs market remained lacklustre at the start of the second quarter, as companies continued to face competition and pressure to control costs.
"Output and new order growth remained firm, but there has been no meaningful growth in private sector employment over the last three months, said Khatija Haque, head of Mena Research at the Dubai lender. "Firms are also discounting prices more aggressively in a sign of an increasingly competitive environment. The decline in selling prices likely supported output and new order growth."
Growth of new work, however, eased slightly from March's near four-year high, but remained sharp overall and stronger than that of the output, while export orders rose modestly in April compared with total new business.
There was also a rise in purchasing activity during the month, with evidence of stock levels being bolstered in anticipation of higher inflows of new orders in the months ahead, Emirates NBD said.
Overall business confidence towards future output rebounded strongly from a six-month low in March to show one of the highest degrees of optimism over the past five years.
Efforts to stimulate sales saw average prices charged for goods and services fall for a sixth straight month in April. The rate of decline was among the quickest seen in almost 10 years of data collection, Emirates NBD said.