The non-oil private sector of Saudi Arabia has recorded more growth in March than it did in more than four years, driven by improvements in purchasing and supply deliver times.
According to the latest data released by S&P Global the seasonally adjusted S&P Global Saudi Arabia Purchasing Managers’ Index posted at 56.8 in March, rising from 56.2 in February, with the Output Index recording the highest growth since Dec. 2017, signaling a sharp improvement in the business condition and new orders.
“The Saudi Arabia PMI continued to signal strong growth in the non-oil economy in March, as new business and activity rose sharply in line with recovering client demand,” David Owen, an economist at S&P Global, commented in the report.
He said supply chains also displayed strength, with lead times shortening to the greatest extent for three years.
“In turn, companies raised their purchasing at the fastest rate since December 2017, supporting higher capacity levels,” added Owen.
The report noted that businesses picked up as the impact of the pandemic on the economy receded, leading to an increase in new clients and export orders, for the first time in three months.
However, it highlighted that a sharp rise in global energy and commodity prices due to the Russia-Ukraine war had imposed an inflated cost burden on Saudi Arabian businesses in March.
Firms commonly saw a rise in the price of petrol as well as several raw materials, leading to a marked increase in purchasing costs. With staff costs also up fractionally, input prices rose at the fastest rate in just over a year-and-a-half, the report added.