October saw an increase in cost burdens at Saudi Arabia’s nonoil producing private sector firms with the rate of inflation the highest since April, according to a report issued by he Saudi British Bank (SABB) and HSBC.

SABB has published the results of the headline SABB HSBC Saudi Arabia Purchasing Managers’ Index (PMI) for October 2013.

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

New export orders rose last month at the fastest pace in the survey’s history, according to the report.

October data signaled a further improvement in operating conditions at Saudi Arabia’s nonoil producing private sector companies, with the headline index posting 56.7, down from 58.7 in September.

The rate of improvement in October was the weakest in three months.

The latest survey results signaled a slowing in output growth at Saudi Arabia’s nonoil producing private sector companies, with the rate of expansion the second-weakest recorded in the 51-month survey history.

The overall rise, however, remained sharp, and was largely linked to increased new business.

In line with the trend for activity, order intakes increased at a slower pace in October.

Anecdotal evidence suggested that improved marketing efforts, increased construction business and good economic conditions all contributed to the overall rise in new work.

Client demand from foreign markets strengthened during October with the pace of expansion accelerating to the quickest in the series history.

Around 36 percent of survey respondents indicated increased new export business, while only 2 percent reported a decline.

Employment levels rose further in October, extending the current sequence of job creation to 25 months.

Increased workloads was repeatedly mentioned as the main driver behind the latest hiring.

The rate of job creation in October was the weakest in five months.

Backlogs of work accumulated further in October, with 10 percent of panel members indicating a rise in outstanding work. Meanwhile, suppliers’ delivery times shortened, albeit to the least marked degree in just over two years.

October saw an increase in cost burdens at Saudi Arabia’s nonoil producing private sector firms with the rate of inflation the highest since April.

According to panel members, the rise in purchase prices was driven by increased raw material prices, stronger demand and general inflationary pressures. In response to increased input costs, companies raised their selling prices.

The overall rise in output charges was, however, marginal.

Purchasing activity continued to increase in October, with companies commenting on higher production requirements.

Input stocks rose in every month of the series history, but in October at the slowest pace in two years.

Driven by predicted new order growth, stocks of purchases also rose during the latest survey period.

The rate of stock accumulation eased, however, to the weakest since December 2011.