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Saudi Arabia’s non-oil private sector expands in November

Faster growth of new businesses drove Saudi Arabia’s non-oil private sector to reclaim some momentum during November, according to the Emirates NBD Saudi Arabia PMI survey.

The overall improvement in business conditions was also underpinned by additional expansion in production, employment and purchases stockpile.

However, overall growth rates have declined slightly since October as data shows prices falling despite increased input costs.

Non-oil private sector companies said this was a result of stronger competition in the market, according to the survey sponsored by Emirates NBD and produced by Markit.

“The improvement in the Saudi Arabian PMI last month is encouraging, particularly against a backdrop of sustained low oil prices and an announced freeze in government spending at the start of Q4,” the survey cites Khatija Haque, head of MENA research at Emirates NBD, as saying.

Haque adds: “ The faster growth in new orders and new export orders in November, and continued strength in output, suggests that both domestic and external demand are supportive of non-oil growth even as momentum has slowed from 2014. We expect that the rise in oil production this year has helped to support manufacturing, underpinning activity in the non-oil sectors of the economy.”

The Emirates NBD Saudi Arabia Purchasing Managers Index (PMI) posted 56.3 in November, up from 55.7 in October. The latest reading signals an upturn from the record low seen in the prior month, but it was still one of the lowest recorded in the series’ history.