GulfBase Live Support
06/12/2016 05:33 AST
Growth in Saudi Arabia’s non-oil private sector picked up in November from a record low in October after a mammoth $17.5 billion bond issue by the
government improved sentiment in the business community, a survey of companies showed.
The seasonally adjusted Emirates NBD Saudi Arabia Purchasing Managers’ Index rose to 55.0 last month from 53.2 in October,
which was the lowest level since the survey was launched in August 2009. A level above 50 means business is expanding.
The bond sale in late October, Riyadh’s first overseas sovereign bond issue, eased fears about Saudi Arabia’s ability to finance itself in an era of low oil prices. It gave the government room to suspend domestic bond issues, causing money market rates to begin pulling back from multi-year highs.
It also helped the government to start repaying billions of dollars in debts to private companies, after months-long delays in payments. That has eased financial pressures on companies, particularly in construction, and fueled a strong rally in the stock market.
“All components of the Saudi PMI increased in November, with output and new orders rebounding strongly from October,” said Khatija Haque, head of regional research at Emirates NBD.
“This is consistent with other evidence showing non-oil sector activity recovering last month, following the Kingdom’s first international debt issue in late October.”
Output growth rose to 60.3 in November from 57.1, while growth in new orders jumped to 59.1 from 54.8, mostly because of stronger domestic rather than export orders. Employment growth accelerated slightly.
Output price inflation turned positive for the first time in three months, while input price inflation increased.
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