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Saudi Arabia's non-oil private sector growth remains robust in February, PMI shows

DUBAI - Saudi Arabia's non-oil private sector continued its robust expansion in February, driven by strong customer sales and increased activity levels, a survey showed on Tuesday, although the pace of growth slowed from the previous month.

The seasonally adjusted Riyad Bank Saudi Arabia Purchasing Managers' Index (PMI) fell to 58.4 in February from a decade-high reading of 60.5 in January but remained well above the 50 mark, signalling strong growth.

The slight dip in the headline PMI was attributed to a cooling in new business growth, which had surged at the start of the year. The new orders subindex slipped to 65.4 in February, from a reading of 71.1 in January.

New sales growth was supported by increased tourism and marketing efforts. The expansion in output, although slightly eased, remained among the sharpest since mid-2023.

Naif Al-Ghaith, Chief Economist at Riyad Bank said despite the deceleration in new order growth in February, businesses remained confident about future demand.

"This was reflected in higher staffing levels, as companies expanded their workforce to meet increased workloads and business expectations," he said.

Employment levels rose at the fastest pace in 16 months, as firms prepared for growth opportunities, with the manufacturing and services sectors seeing the strongest employment growth.

Input costs continued to rise, driven by higher material prices and wages, but the pace of inflation eased slightly and firms reported only a modest rise in selling prices due to competitive pressures.

Business confidence reached a 15-month high, with firms optimistic about economic growth and supportive government initiatives.