Riyadh – Mubasher: Saudi Arabia’s headline seasonally adjusted Purchasing Managers’ Index (PMI) retreated to 58.4 in December 2024 from 59 last November, according to Riyad Bank’s latest data.
Non-oil businesses highlighted that strong economic conditions, along with higher client demand and new marketing campaigns, led to a considerable upturn in new work at the end of 2024.
Derived by strong exports, total sales volumes increased at the fastest pace in 12 months, leading to robust upturns in business activity and inventories.
Total business output increased at a marked pace during December as firms looked to boost capacity amidst increasing sales volumes.
The survey data reflected the sharpest increase in new export orders for 17 months, as panellists commented on product innovations and strong relationships with international clients.
Naif Al Ghaith, Chief Economist at Riyad Bank, said: “The non-oil GDP is expected to grow by more than 4% in 2024 and 2025, driven by substantial improvements in business conditions.”
“A significant rise in new orders has bolstered this growth, indicating increased market confidence and demand. This surge is supported by elevated domestic demand and strengthening exports, which have propelled total sales volumes to their highest levels in a year,” Al Ghaith indicated.
He mentioned: “Despite challenges such as sharp cost inflation due to strong input demand, the sector has navigated these pressures effectively. December saw a notable increase in material costs, yet wage costs rose more moderately.”
“Some firms opted to reduce prices in response to strong competition and elevated stock levels, resulting in only a slight rise in average prices charged since November. This competitive pricing strategy has helped mitigate inflationary impacts,” the Chief Economist concluded.
