Growth in business activity in Saudi Arabia's non-oil private sector jumped to a nine-month high in April, boosted by strong output and new orders, the SABB HSBC Saudi Arabia Purchasing Managers' Index said Saturday. The Index, which measures activity in the manufacturing and services sectors, rose to 60.42 in April from 58.73 in March. The seasonally adjusted index stayed well above the 50-point mark distinguishing growth from contraction. Registering above the series trend, it was the highest reading for nine months, and signaled another marked improvement of operating conditions across the Saudi non-oil private sector. New order growth was the highest since June 2011, at 70.13 points in April against 66.87 in March. "Respondents commented on improved demand conditions and more business from government contracts," the survey said, adding that data suggested the domestic market remained a key driver for new order growth. Output growth levels also climbed, reaching 65.20 in April from 62.68 in March. The employment index rose sharply to 55.76 from 52.46. The report pointed out that respondents commented on improved demand conditions and more business from government contracts. To accommodate gains in new business, the Saudi non-oil private sector firms raised output during April. The rate of growth was sharp and above the trend for 2012 so far, said the SABB data. With new order growth continuing to outstrip the expansion in output, levels of unfinished business continued to build at the non-oil private sector companies. The accumulation of backlogs was solid, and the seventh in as many months, the report pointed out. Cost inflation accelerated during April to a new survey record, pushed up by higher purchasing prices for raw materials and fuel, as well as higher staff costs. To protect profit margins, and in light of strong demand, non-oil private sector firms increased their own tariffs at a solid pace, it added. In order to keep up with rising business requirements, companies raised both employment and purchases during April. Job creation was the most marked for nearly a year, while buying activity increased at a joint series-record pace. As a result of higher acquisitions, input stocks at the non-oil private sector firms in the Kingdom accumulated at a steeper pace. Panelists said that holdings were increased as expectations of new order growth were positive, said the SABB index.
