It said new business received by Saudi Arabian nonoil producing businesses increased at a marked rate during January.
SABB has published the results of the headline SABB HSBC Saudi Arabia Purchasing Managers’ Index (PMI) for January 2012 — a monthly report issued by the bank and HSBC.
It reflects the economic performance of Saudi Arabian non-oil 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.
Rising to 60.0 in January, from 57.7 in December, the PMI signaled a robust start to the year for firms operating in Saudi Arabia’s non-oil private sector.
The improvement in business conditions was supported by an acceleration of already strong growth rates of both new orders and output over the month.
Overall new order growth accelerated to a six-month high, while new business from abroad grew at a stronger rate for the second successive survey period.
As a result, backlogs of work were accumulated for the fourth month running, and at the fastest pace since April 2011.
The improvement in demand and higher backlogs encouraged companies to increase their output levels further in January.
The rate of expansion was marked and stronger than in any month in the second half of 2011. A number of panelists also perceived that an improved business environment contributed to the increase.
Strong business sentiment was also apparent as businesses increased employment and purchasing activity to help meet existing and expected future activity requirements.
The pace of job creation quickened for the third consecutive month during January, but nevertheless remained below the long-run series average.
Greater acquisitions of inputs boosted stocks held by non-oil producing companies.
The rate of expansion in purchases held quickened to its fastest pace in six months.
However, revenue improvements were offset to some extent by rising input costs. Strengthening cost pressures were amplified by higher purchasing prices during January. Nonoil producing firms registered a robust rate of purchasing price inflation, a marked difference to the near one-and-half-year-low recorded in December.
The rate at which salary payments increased also quickened over the month.
Despite growing demands, vendor performance continued to improve, with lead times shortening at a faster pace.
The reduction in suppliers’ delivery times extended the current sequence of improvements to six months.
