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Saudi Arabia's private non-oil sector growth accelerates in August-PMI

A survey on Wednesday showed that Saudi Arabia's private non-oil sector growth was stable during August. Business activity expanded at a faster pace than it did in July as new orders rose.

The Riyad Bank Saudi Arabia Purchasing Managers' Index grew to 56.4 from 56.3 in August, and remained above the 50 mark indicating growth.

Naif Al Ghaith is the chief economist at Riyad Bank. He said that "the slight increase was a sign of another month's steady growth driven by improved demand conditions, modest growth in output, and continued gains in employment."

"Although the growth in activity has slowed from the highs of earlier this year, there is still a positive trend."

The growth of new orders was accelerated by the improved economic conditions. New export orders were also boosted by marketing and collaborations in the Gulf Cooperation Council Region, which marked the fastest increase in four months.

The subindex of new orders increased to 60.1 from 59.7 points in July.

The number of employees continued to increase, although at a slower rate than previous months. Companies expanded their sales teams and launched new projects. In response to increasing orders, inventory growth reached its highest level in four months.

The survey revealed that companies raised their prices for the third month in a row, and faced a steep rise in input costs due to higher purchasing costs as well as global inflationary pressures.

The business confidence index rose from its 12-month low reached in July, and the outlook for output increased. This indicates a positive mood among non-oil private sector companies. (Reporting and Editing by Hugh Lawson).

(source: Reuters)