The Saudi British Bank “SABB” has published the results of the headline SABB/HSBC Saudi Arabia Purchasing Managers’ Index™ (PMI™) for April 2013 – a monthly report issued by the bank and HSBC. It reflects the economic performance of the Saudi Arabian non-oil producing private sector companies through the monitoring of a number of variables, including output, orders, prices, stocks and employment.
April data suggested a further improvement in operating conditions in Saudi Arabia’s non-oil producing private sector, as the headline PMI posted 58.0, down slightly from 58.9 in March. While the latest survey data marked the lowest reading in five months, the rate of improvement remained sharp.
Output levels continued to increase at a solid pace in April, with 31% of respondents indicating a rise in production. Panellists linked the expansion to improving market conditions and increased incoming new business. Driven by improved marketing efforts, order book volumes rose during the latest survey period. The rate of growth moderated slightly from March, but remained sharp. New business from abroad also rose at a slightly weaker rate than in the previous survey period.
Non-oil producing private sector companies in Saudi Arabia indicated a third successive monthly increase in levels of outstanding business. Increased new orders was cited as the main reason for the rise in work-in-hand. Meanwhile, vendor performance improved at the sharpest rate in four months.
Overall input costs continued to increase during the latest survey period, but the rate of cost inflation eased slightly from March. While an increase in purchase prices was driven by general inflationary pressures, average staff costs were broadly unchanged from the previous month. Output prices charged by Saudi Arabian non-oil producing private sector companies rose moderately in April, as the majority of respondents indicated unchanged charges from the previous month. Where higher charges were reported, panellists commonly commented on increased input costs.
Purchasing activity increased further during April, as 35% of companies recorded a rise in the quantity of inputs purchased. According to anecdotal evidence, the rise was encouraged by increased incoming new business volumes.
Input stocks at Saudi Arabian non-oil producing private sector companies rose during April, as companies predicted growth of incoming new business and production requirements.