JEDDAH – Activity in Saudi Arabia's non-oil private sector slowed down in November, Saudi British Bank (SABB) said Monday in the SABB HSBC Saudi Arabia Purchasing Managers' Index (PMI) for November. The seasonally adjusted PMI for the non-oil private sector economy dropped to 57 in November from 59.8 in October. A PMI reading above 50 suggests expansion in the sector, while one below indicates contraction. New business in the sector continued to increase in November, though at the slowest pace in more than one year, reflecting the overall improvement in market conditions. In line with the growth in new orders, production increased further during the month. Firms raised their workforces for the fourteenth successive month in November, and at a higher rate than in the previous month. Input price inflation faced by non-oil private sector firms weakened to the lowest level in 24 months, data showed. Output levels rose further in November with more than one out of four respondents reporting an increase in production. According to anecdotal evidence, one of the main reasons behind the rise was higher new orders. More than 40 percent of the panelists surveyed indicated an increase in the level of orders received and linked this to good market conditions. The rate of growth was, however, the lowest since September 2011. Meanwhile, the level of outstanding business decreased for the first time in four months. The clearing up of pending orders was often mentioned as the primary factor highlighted by firms that reported lower levels of outstanding business. Employment levels rose for the 14th successive month in November, and at a higher rate than in the previous month. Where an expansion of workforce numbers was reported, respondents linked this to increased business requirements. Companies increased salaries in November and partly attributed this to higher living costs. Average lead times at non-oil producing firms in the Kingdom shortened in November, at a slightly stronger rate than in October with almost 20 percent of the respondents reporting an improvement in suppliers' delivery times. Mainly driven by increased purchase prices, average tariffs charged for goods rose compared with the situation in October. The rate of purchase price increases eased in November and scored its joint-lowest reading since July 2010. Hand-in-hand with slower purchase price inflation, the Overall Input Prices Index recorded its lowest level in 24 months. Driven by an increase in new orders, purchasing activity rose in November and led to solid growth in inventory holdings. More than one-in-three respondents indicated an increase in their quantity of items purchased. — SG
