Saudi Non-Oil Business Growth Hits 6-Month High In March

Growth in Saudi Arabia’s non-oil private sector accelerated to a six-month high in March, a survey of businesses showed on Sunday, indicating the Kingdom’s economy continues to comfortably ride out low oil prices.

The seasonally adjusted SABB HSBC Saudi Arabia Purchasing Managers’ Index rose to 60.1 points last month from 58.5 points in February. The 50-point level separates expansion from contraction.

The Saudi government has continued spending heavily on economic development and welfare projects despite the plunge of oil prices since last June. It is drawing down its huge foreign currency reserves to cover its budget deficit.

Output growth surged to 67.6 points in March, its fastest since June 2011, the survey showed. New order growth accelerated to 67.3 points.

Employment growth slowed slightly but remained strong at 53.7 points. Output price inflation edged up to 50.4 points but input price inflation increased faster, to 53.7 points.