Non-oil activity in Saudi Arabia at 16-month high

• Kingdom’s PMI hits 59 in November
• Sharpest growth since mid-2023
• Kuwait, Egypt, Turkey all improved

Activity in Saudi Arabia’s non-oil economy has hit a 16-month high, as the country’s diversification efforts continue to show results.

The S&P Saudi Arabia Purchasing Managers’ Index – a composite measure of non-oil private sector performance – rose from 56.9 in October to 59 in November, the fourth successive month in which the headline index has risen. 

The rate of growth in new orders, employment, output, suppliers’ delivery time and stocks of purchases was the sharpest recorded since the middle of 2023.

Companies in the kingdom linked the rise in the PMI to a faster upturn in new orders and growth in international sales.

Naif Al-Ghaith, chief economist at Riyad Bank, said the rise in the PMI showed the continued success of economic diversification efforts.

“The acceleration in purchasing activity and inventory expansion suggests businesses are gearing up for continued growth in demand,” Al-Ghaith said. 

Growth in the UAE’s non-oil sector grew steadily in November, while strong demand conditions and competitive client pricing helped increase business growth, according to the UAE purchasing managers’ index from S&P Global. The survey data continued to signal a relatively muted jobs market in the non-oil sector, with the rate of job creation hitting a 31-month low.

"Despite the positive headline figure, the survey data signalled a degree of uncertainty among firms about how long this strength will last,” said David Owen, senior economist at S&P Global Market Intelligence.

“Confidence in future business activity was relatively subdued - the second lowest since early last year - and there were further mentions from panellists that markets are becoming crowded, curbing pricing power."

Activity in Kuwait also increased rapidly, according to S&P. Kuwait’s headline PMI rose to 55.9 in November, well up from the reading of 52.7 in October. Rates of increase in purchasing activity and new stock were the sharpest on record in the country and companies raised their staffing levels at the joint-fastest pace since the survey began in September 2018.

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In Qatar the PMI edged up to 52.9 in November from 52.8 in October, with strong employment and increases in business activity fueling the growth in the index.

Egypt recorded an improvement, with a PMI of 49.2, up from 49 in October, meaning business conditions declined at a slower rate. Input prices rose at the slowest pace since July, though firms exhibited less confidence about future business activity, so hired less.

Turkey showed signs of improvement, with the latest reading of 48.3 up from 45.8 in October.