The Saudi British Bank (SABB) has published the results of the headline SABB/HSBC Saudi Arabia Purchasing Managers’ Index (PMI) for November 2014 — a monthly report issued by the bank and HSBC.

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

Growth of Saudi Arabia’s nonoil private sector economy was sustained during November, but at a slower pace as output, new orders and employment all increased at weaker rates. After accounting for seasonal factors, the headline PMI recorded 57.6, compared to 59.1 in October.

November’s SABB/HSBC PMI research data indicate a continued expansion of nonoil private sector output, in line with the trend throughout the history of the report. However, the rate of growth continued to slow markedly amid some reports of increased competition and slower demand compared to earlier in the year.

Subsequently, new orders also rose at a weaker pace (the lowest since May 2014). However, research participants commented that market conditions remained positive overall, and that they had benefited from a firmer gain in new export orders. November’s data showed that export sales rose at an above average rate over the month.

Capacity remained under pressure in November as highlighted by another marked increase in levels of work outstanding. Backlogs rose for a twenty-second month in a row, with the rate of growth marked and higher than the research data average. Companies responded by adding to their staffing levels for an eighth successive month. However, the rate of growth eased to a modest pace that was the slowest since July.

On the price front, competitive pressures meant that output charges rose only modestly during November. Of the small proportion of companies that indicated a rise in output prices, they generally did so to pass on increased operating expenses.

Latest SABB/HSBC PMI data showed that overall input prices continued to increase at a marked pace, led primarily by higher purchase prices. Higher demand and general economic pressures were reported to have pushed up prices.

Average staff costs also continued to rise, but at the slowest pace for five months as the vast majority of companies left salaries/wages unchanged.

Finally, in line with a slowdown of output and new order growth, purchasing activity was also increased at a weaker pace during November.

Companies were nonetheless able to add to their inventories, albeit at the weakest pace since July. Positive expectations for growth were reported to be a key factor behind the latest stock accumulation.