Saudi Arabia's non-oil private sector continued to grow in August, a business survey by IHS-Markit showed.
The seasonally adjusted IHS Markit Saudi Arabia Purchasing Managers' Index (PMI) dropped to 54.1 in August from 55.8 in July, remaining above the 50 mark that separates growth from contraction.
"The index still pointed to a solid rise in non-oil activity, one that was commonly linked by survey panelists to demand improvements and the easing of travel measures."
At the same time, selling prices increased at a solid pace, with inflation accelerating to the quickest seen for a year.
According to IHS-Markit, New business continued to grow sharply over the month, although as was the case for output, the rate of growth slipped from July. It was partly due to a softer increase in export sales, as the resurgence of COVID-19 cases in other parts of the world dampened the recovery in foreign demand.
Saudi Arabian firms continued to report a low level of hiring activity during August. The rate of job creation was unchanged from July and marginal, with companies highlighting that current output capacity was sufficient to complete existing work.
"Weak hiring was also linked to a subdued level of business confidence in August. With only 11% of survey respondents expecting output to increase over the forthcoming year, the degree of optimism was among the lowest seen in the series history, despite improving slightly from July."
Meanwhile, slower rises in output and new orders led to a softer purchasing growth halfway through the third quarter. Subsequently, stocks of purchases grew at the weakest pace for ten months.
Since March, supplier delays were recorded for the first time, linked to global raw material shortages and longer wait times for border checks.
On the prices side, the latest data signaled the softest rise in input costs for six months, driven by a slowdown in purchase price inflation and a renewed drop in staff expenses. Where costs rose, firms cited higher prices for oil, transport, and raw materials such as aluminum.
At the same time, selling prices increased at a solid pace, with inflation accelerating to the quickest seen for a year. Firms indicated that higher input costs, strengthening demand, and a mark-up in competitors' prices encouraged them to raise their charges.
