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Saudi non-oil business activity expands at fastest rate in 7 years

Saudi unemployment Reuters
The finance ministry expected average inflation at 2.6% at the end of 2022

Saudi Arabia’s non-oil business activity expanded at the fastest rate in seven years in November, supported by a sharp rise in new orders and continued confidence in the growth outlook, a survey showed on Monday.

The seasonally adjusted Riyad Bank Saudi Arabia Purchasing Managers’ Index rose to 58.5 in November, from 57.2 in October, the highest reading since September 2021, and remained well above 50, which separates growth from contraction.

New order growth accelerated to a 14-month high leading to increased purchasing activity on the back of improving economic conditions, rising demand and increased investment.

The output sub-index rose to 64.6 in November from 61.3 the previous month while the new orders sub-index accelerated to 65.7 from 62.9 in October. The manufacturing, construction, wholesale and retail and services sectors all recorded strong growth, the survey said.

Aside from strong domestic conditions, new export business also saw the fastest increase since November 2015.

“The Saudi economy is continuing its expansion in the non-oil sector in November, business conditions have improved across the board in light of rising demand,” said Naif Al-Ghaith, chief economist at Riyad Bank.

“Improved business expectations was also observed as a result of the ongoing execution of Vision 2030 initiatives, which provided confidence to the outlook of future output of the non-oil activities.”

A rise in employment was milder in November than has been in recent surveys and higher global inflationary pressures led to higher costs, and quicker increase in output charges.