DUBAI: Non-oil business activity in Saudi Arabia grew solidly in December, a survey showed on Wednesday, with new orders rising at the fastest pace in six months.
The seasonally adjusted Riyad Bank Saudi Arabia Purchasing Managers’ Index stood at 57.5 in December, the same as November’s reading, ending the year well above the 50 mark signalling growth.
The output sub index with a reading of 61.0 also remained broadly at similar solid levels in December as in the previous month, while new orders surged with the sub index advancing to 68.3, up from 66.3 in November and the highest reading since June on improving demand.
The strongest rise was in the manufacturing sector.
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“This growth was supported by a sharp rise in business activity and exports, highlighting the resilience and strength of the non-oil economy,” Naif Al-Ghaith, Riyad Bank’s chief economist, said.
However, while firms continued to add jobs in December, the pace of growth in employment slowed further last month from November and was sharply lower than October’s nine-year high.
Joblessness among Saudi citizens rose to 8.6% in the third quarter, latest government data showed, from 8.3% in the second quarter, but still lower than the 9.9% recorded in the same period a year earlier.
The kingdom is investing heavily to diversify away from hydrocarbons, expand the private sector and create jobs for Saudis; non-oil growth is expected to significantly outpace overall growth in 2023 as lower oil prices and production weigh.
While survey respondents expected output activity to continue to expand in 2024, the degree of confidence softened in December from the previous month. Construction firms were more optimistic about growth prospects than other sectors.
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