The Saudi British Bank “SABB” in its monthly report on economic performance of the Saudi Arabian non-oil producing private sector companies has signaled a further solid improvement in operating conditions of the sector, with the seasonally adjusted headline PMI Index posting 58.5, rising from March's 57.0. The SABB/HSBC Saudi Arabia Purchasing Managers' Index for April 2014 is arrived at by monitoring of a number of variables, including output, orders, prices, stocks and employment. Improving economic conditions remained one of the main factors behind the latest solid expansions in output and new orders, according to survey participants. Activity rose at a slightly sharper rate than in last March, while the increase in new orders was the quickest since the beginning of the year. New export business also rose in April, but the rate of growth was down from March's levels. A renewed rise in workforce numbers was reported by Saudi Arabia's non-oil private sector firms, following a month of fractional job shedding. Increased business requirements were the main reason for the rise in staffing levels, according to survey respondents. Meanwhile, backlogs of work rose for a 15th straight month, as new order growth imparted further pressure on operating capacity. Overall input prices increased further in April, but the rate of cost increases eased to the weakest since mid- 2010. While general economic pressures and increased raw material costs accounted for much of the latest rise in purchase prices, average staff costs rose only fractionally, with the vast majority of survey respondents signaling no change. In response to higher input costs, Saudi Arabia's non-oil private sector firms raised their selling prices in April. Charge increases accelerated to the sharpest in nearly one-and-a-half years. As has been the case throughout the 57-month survey history, suppliers' delivery times shortened further in April. The latest improvement in vendor performance was, however, the weakest since February. With output and new orders rising, Saudi Arabia's non-oil private sector companies increased their purchasing activity in April. The latest expansion was the sharpest since November last year, with around 30% of the survey participants reporting higher buying activity. Meanwhile, the latest survey data signaled a further rise in stocks of raw materials and other pre-production inventories. The latest increase in input stocks was sharper than in March, but remained below the long-run series average. —SG
