JEDDAH – The Saudi Arabian non-oil private sector continued to show considerable resilience in the face of a global economic slowdown in June, with output, new orders and employment all up at rates little-changed from one month previously, the Saudi British Bank HSBC Saudi Arabia Purchasing Managers' Index (PMI) for June 2012 report released Tuesday said. Cost pressures meanwhile also remained relatively stable. June saw the seasonally adjusted PMI dip from 60.4 in May to 59.7, signaling a further, albeit slightly slower, improvement in overall operating conditions across the Kingdom non-oil private sector economy. Total output levels increased at a marginally faster rate in June, albeit one that was still below the average recorded since data collection started almost three years ago. Anecdotal evidence linked the rise in activity to improving economic conditions, particularly in the domestic market, and an associated rise in incoming new orders. June data showed a further marked rise in total new work placed with non-oil private sector business in Saudi Arabia, which survey respondents partly attributed to greater efforts in the areas of marketing and sales. New export orders also increased on the month. In both cases, growth was slightly weaker than in April and May. Purchasing activity followed a similar trend in June, increasing at a marked rate that was nevertheless the slowest recorded so far this year. Anecdotal evidence showed that firms increased input buying to satisfy rising output requirements, but also to accumulate preproduction stocks. Stocks of purchases were built at a rate that was only fractionally down on May's 12-month record. Suppliers' delivery performance meanwhile continued to improve in spite of the increased demand for inputs. Employment levels rose for the ninth successive month during June. “The overall rate of job creation was the weakest for three months,” the Index noted. Overall input cost inflation facing Saudi private sector companies was broadly unchanged since the preceding survey period, and strong by the historical standards of the series. Output prices were raised as a result, though the rate of inflation was the weakest for four months amid stronger competitive pressures. Meanwhile, GCC markets were down in June, losing 2.91 percent after a decrease of 6.1 percent in May, the Kuwait Financial Centre (Markaz) sain in a report Tuesday. All GCC markets except Abu Dhabi were in the red. Tadawul All Share Index was the largest loser shedding 3.80 percent for the month, followed by Qatar which lost 3.49 percent. Dubai has been the best performing market YTD, with a gain of 7.28 percent. Kuwait lost 0.60 percent in June while Bahrain and Oman both lost 1.13 percent, said Markaz in its monthly analysis of GCC bourses. Volume decreased 36 percent MoM in the GCC and value traded also decreased 24 percent to $37.5 billion. – SG
