Saudi Arabia’s nonoil private sector economy continued to register improved operating conditions last month, according to a survey.

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

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.

Saudi Arabia’s nonoil private sector economy continued to register improved operating conditions during December. Moreover, a rise in the headline PMI to 57.9, from 57.6, pointed to a strengthened pace of improvement compared to November. However, the index remained below levels seen earlier in the year.

Supporting overall sector growth was a strengthening in the rate of output expansion. Around a third of the survey panel reported that production at their units was higher than one month ago, with marketing and the start of new projects amongst the factors reported to have boosted activity at their units.

Growth was also driven by a further gain in incoming new business.

Panellists reported that advertising and generally firmer demand had underpinned the latest rise in new work.

However, there was evidence of increased competition in the marketplace.

Some companies subsequently saw a slowdown in the rate of new business growth, which overall eased to the lowest in seven months. That was despite the best increase in new work from abroad since March 2014.

Capacity remained under pressure over the survey period, with backlogs of work rising for the 23rd successive month. The rate of growth was again marked, but was the lowest since August. Higher orders remained the principal driver of rising backlogs, according to panellists.

Responding to ongoing growth in workloads, panellists continued to add to their staffing levels over the month.

Payrolls were added to for a ninth month in a row, with companies noting that the start of new projects and rising volumes of new business had encouraged them to take on new staff.

As part of efforts to service higher business requirements, nonoil private sector companies continued to bolster their purchasing activities in December. Latest data showed input buying rising at a marked pace.

An increase in procurement subsequently led to an increase in stocks of purchases, although the rate of growth was the slowest since May.

On the price front, input price inflation was unchanged during December.

Higher costs largely reflected a rise in purchase prices, which in turn were reported to be the result of increased raw material and food prices.

Average salary/wage costs rose at a modest pace that was the slowest since May.

Average prices charged by panellists were little changed since the previous month, according to December’s survey data.