Saudi Arabia’s nonoil private sector economy continued to grow at a strong pace during January, according to a monthly report issued by the Saudi British Bank (SABB) and HSBC.

SABB has published the results of the headline SABB HSBC Saudi Arabia Purchasing Managers’ Index (PMITM) for January 2015.

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.

The nonoil private sector economy continued to grow at a strong pace during January, with the seasonally adjusted PMI remaining well above the 50.0 no-change mark.

January’s reading of 57.8 was little moved on December’s 57.9 with the headline index supported by ongoing increases in output, new orders and employment.

Latest data showed that new order volumes increased at the sharpest pace for four months amid reports of strong demand and good market conditions. There were a number of comments from the survey panel that strong reputations and increased marketing efforts had also driven the latest increase in new business.

That said, the latest survey suggested that competitive pressures were prevalent.

None more so was this evident in the latest data on output prices, which showed broadly no change in the average prices charged by Saudi Arabia’s nonoil private sector companies. This was despite another round of input price inflation, with purchase prices reported to have increased at a solid pace at a time when average staff costs increased only modestly.

January’s survey indicated that output continued to be raised in line with ongoing growth of new work. However, the rate of expansion in production, although strong, matched November’s recent low and was well below the survey average.

With new orders rising at an accelerated rate, but output growing at a slower pace, companies continued to signal some capacity pressures which manifested themselves through higher backlogs. Work outstanding has now increased for two consecutive years, and the latest rate of growth was again above the survey average.

Companies responded by adding to their payroll numbers for a tenth successive month.

The rate of growth eased to a six-month low, but nonetheless remained solid as firms reported having to recruit additional staff in line with rising production requirements.

A further by-product of higher output was a continuation of strong purchasing activity from the survey panel. Latest data showed that input buying rose markedly, albeit at a slightly slower rate.

Part of the increase in purchasing went directly into stock, with input inventories rising at a slightly accelerated rate in January. Companies signalled positive expectations for production.