Growth in business activity in Saudi Arabia’s non-oil private sector fell slightly in February but remained strong, supported by new orders, a survey of over 400 private companies published on Monday showed.
The SABB HSBC Saudi Arabia Purchasing Managers’ Index (PMI), which measures activity in the manufacturing and services sectors, slid to 59.62 in February from 60.04 in January. The seasonally adjusted index stayed well above the 50 mark distinguishing growth from contraction.
New order growth was 68.58 in February against 68.90 in January but it remained above the average over the 31-month history of the survey.
Overall input price inflation accelerated to 59.21, near the record high for the series, from 58.37 because of rises in both personnel and purchasing costs. Purchasing cost inflation hit an eight-month high, with about 22 percent of respondents noting a rise in prices and only 4 percent reporting a decline.
Wages rose in February because of higher living costs, harder work by employees and the costs of the government's drive to move Saudi citizens into more jobs. However, staff cost inflation was the lowest since last October.
Analysts in a Reuters poll conducted in December predicted Saudi Arabia’s gross domestic product would expand 4.0 percent this year, after an officially estimated 6.8 percent last year, but a sharp rise in global oil prices since then may make that forecast too conservative.