Non-oil trade activity rebounded in Saudi Arabia in March, supported by strong demand and output accelerating to a six-month high.
Operating conditions in the Kingdom’s non-oil private sector showed a strong improvement at the end of the first quarter, according to the latest data issued by the Saudi Riyad Bank Purchasing Managers’ Index (PMI).
Business activity expanded sharply in six months, with companies highlighting strong increases in the volume of orders and new customers. This improvement led to an acceleration in the growth rate of procurement and another round of staff hiring, in parallel with a further reduction in cost pressures, especially wages.
The seasonally adjusted Riyad Bank PMI reached 57 points in March, well above the 50-point level that separates growth from contraction. The index statement indicated a noticeable improvement in business conditions at the level of the non-oil private sector economy.
The production sub-index rose to 62.2 points in March from 61.5 points in the previous month, the fastest pace of growth since September, supported by new orders, especially in the manufacturing sector.
According to the statement, production levels in non-oil producing companies witnessed a significant expansion during the month of March. The recent rise was the highest in six months, with most companies linking increased activity to strong demand.
Similarly, the volume of new orders received by non-oil producing companies increased sharply in the latest study period, and the expansion rate accelerated for the second month in a row.
“The strong performance witnessed across various sectors, coupled with the notable increase in order books and new customers, signifies a resilient market poised for growth,” said Naif Al-Ghaith, chief economist at Riyad Bank.
“The positive momentum also prompted accelerated purchasing activities and additional hiring, underscoring a buoyant market outlook,” he added.
Non-oil producing companies expect demand conditions to continue to support business activity in the future. Expectations for the next 12 months were positive, the strongest since last November.
