The headline index climbed to a series record peak of 63.8 in January, from 61.3 in December. The latest reading signaled a substantial and accelerated improvement in the health of the Kingdom's nonoil producing private sector.

Nonoil private sector activity rose at a series record pace in January, supported by an unprecedented rise in new business. Incoming new work grew rapidly, which panel members linked to a combination of beneficial economic conditions, good demand, promotional work and strong company reputations. Data showed that both domestic and export markets were significant contributors to January's expansion of total new orders, although the former remained the leading factor.

Saudi Arabian nonoil private sector firms posted a 13th successive build up of unfinished work at their units in January. Outstanding business accumulated at a solid and accelerated pace as new order levels rose.

Firms expanded capacity in January, responding to greater current and expected business requirements. Employment, buying activity and stocks were all increased on the month. Staffing grew solidly, albeit at a marginally weaker rate than in December, while both purchases and input stocks rose at near series record rates.

Average vendor performance continued to improve at the start of 2011, despite a stronger demand for inputs. Lead times shortened modestly and at the fastest rate for three months, which panel members attributed to supplier efficiency and intense competition among vendors. The rate of improvement was far slower than in January 2010.