The index results were released in a monthly report issued by the Saudi British Bank (SABB) and HSBC.

It reflects the economic performance of Saudi Arabian nonoil producing private sector companies and establishments through the monitoring of a number of variables, including output, new orders, exports, input prices, output prices, quantity of purchases, stocks and employment.

The pace of improvement in Saudi Arabian nonoil private sector operating conditions eased further at the end of the third quarter, as growth rates of both output and new orders cooled to series-record lows and employment fell for the first time in the survey history.

The PMI slipped further, reaching a new low of 54.5 (from 57.9 in August).

September data, meanwhile, showed a further slowdown in input price inflation.

Growth of incoming new business continued to slow during the latest survey period, reaching a new survey low.

Nevertheless, the rate of increase remained strong and panelists commented on a favorable economic environment and new product launches.

Some companies indicated that government spending had improved business conditions.

Overall new work increased to the greatest extent at medium-sized companies.

New export orders rose at the mildest rate for 10 months.

Expansions in output, buying activity and input stocks all slowed further during September, in line with the easing trend in new order growth.

In each case, the rate of increase was a series-record low.

Lead times shortened for the second month running in September, and to a greater extent than in August.

Reports indicated that better supplier performance resulted from sufficient capacity at their units and efficient service.

However, the rate of improvement remained modest by historical standards.

There was evidence of spare capacity at Saudi Arabian nonoil private sector firms in September, as both backlogs and staffing levels fell slightly.

Outstanding work declined for the first time since December 2009, while employment contracted for the first time in the series history. September’s price indicators pointed to further moderations in rates of inflation of both input costs and charges.

Overall input costs increased at the slowest rate for eight months, which reflected milder rises in both purchase and staff costs.

Output prices, meanwhile, increased at the weakest pace in the survey history.