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PMI: Saudi Arabia's private non-oil sector has grown the most in six months.

A survey revealed that the non-oil sector of Saudi Arabia expanded at its fastest rate in six months during September. This was due to a surge in orders and an increase in output.

The Riyad Bank Saudi Arabia Purchasing Managers' Index climbed from 56.4 to 57.8 (seasonally adjusted) in September, the highest improvement in operating conditions seen since March.

Firms saw an increase in new orders, as they benefited from a strong market, new customers, and competitive pricing. For the second month in a row, new orders from overseas clients increased.

The new order subindex jumped to 63.3 from 60.1 in August due to a robust domestic and international demand.

The output growth rate has increased at the fastest pace since February.

Naif Al Ghaith is the chief economist at Riyad Bank. He said, "Overall, the September survey shows a resilient, private sector which is navigating through cost pressures and benefiting from a firm demand, as well as steady hiring."

According to a statement released before the budget, Saudi Arabia's government forecasts a real GDP growth rate of 4.4% by 2025. The non-oil sectors are expected to grow at 5%. This growth is supported by an increase in domestic demand and better employment rates.

The employment growth in September was driven by a higher demand, and the need to efficiently manage workloads. The hiring rate was steady, but the subindex for this measure showed a slight decline from the previous month.

Input price inflation has dropped to its lowest level in six months, mainly due to higher wages and costs of suppliers.

The optimism for the future improved as firms became more confident in increased demand and large-scale infrastructure project. (Reporting and Editing by Hugh Lawson).

(source: Reuters)