SABB/HSBC PMI Index signals promising start for 2013
- Saudi Arabia: Monday, February 04 - 2013 at 10:28
- PRESS RELEASE
The Saudi British Bank "SABB" has published the results of the headline SABB/HSBC Saudi Arabia Purchasing Managers' Index (PMI) for January 2013 - a monthly report issued by the bank and HSBC.
Operating conditions in the Saudi Arabian non-oil producing private sector remained positive at the beginning of 2013, as the headline PMI posted a reading of 58.1, down slightly from December's 58.9. Output and new orders increased solidly but input price increase picked up. Meanwhile, employment levels continued to rise.
Output rose at Saudi Arabian non-oil producing private sector companies during January. The rate of growth slowed slightly, but remained marked. Almost 45% of survey respondents indicated an increase in new orders, which was mainly driven by improved economic conditions and good sales team efforts. New business from abroad increased in January, albeit at the slowest pace in five months.
The latest survey data signalled a decrease in work outstanding at non-oil producing firms in Saudi Arabia. Increased capacity helped support the clearance of work-in-hand. Employment levels increased further in January, and the rate of job creation was in-line with the overall series average. An increase in new orders was reported to be the main driver behind the latest rise in payroll numbers.
Output prices at non-oil producing private sector companies rose during January, and at a slightly sharper rate than in December. The rise in output prices was linked to higher input costs and increased market demand.
Overall input prices rose during January, while the rise in purchase prices was driven by higher raw material prices and general economic pressures. Panellists also reported higher average staff costs. This was linked to the hiring of additional employees.
January data signalled a rise in purchasing activity at Saudi Arabian non-oil producing private sector firms, and the rate of growth was higher than in the previous survey period. Almost one-in-three respondents indicated an increase in buying, while only 6% recorded a decrease.
Stocks of purchases continued to increase during January. There was some evidence that growth was driven by expectations of an increase in new orders and production over the coming months.
Meanwhile, suppliers' delivery times continued to shorten. Only 2% of companies reported a worsening in vendor performance, while 12% indicated an improvement. According to anecdotal evidence, the shortening of suppliers' delivery times was partly due to improved payment schedules.
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