DUBAI (Reuters – Saudi Arabia’s private non-oil sector recorded its 14th consecutive month of growth in October. The sector saw an increase in output at the highest rate since December 2017. This indicates the sector’s continuing strength, according to a Wednesday survey.

Although the seasonally adjusted IHS Markit Saudi Arabia purchasing managers’ index (PMI), fell to 56.7 in October, it still remained at or above the 50 mark that distinguishes between growth and contraction.

The series average was 56.9, and the October reading (with the exception of September) was the highest rate of growth since Nov 2019. In October, the output subindex increased to 62.1 from 61.2.

According to the October PMI data, non-oil sectors are showing a fast recovery. According to David Owen (economist at IHS Markit), the output growth was the most impressive in almost four years. This is due to a significant rise in demand for clients as COVID-19 has been lifted.

The “new order growth” fell from the September high, but was still strong, especially when compared with the levels seen at the beginning of the pandemic.

Saudi Arabia’s private non-oil companies continued to see a bright future for their business with optimism based on the expectation of increased demand. This sentiment was second-highest in the year, but it was slightly lower than September. It is still well below the series average from April 2012.

“October saw a sharpening in the rate of purchasing cost inflation, which is a further sign that increasing commodity prices are affecting firms’ balance sheets,” Owen said. Owen explained that companies were able pass on the fastest rise in output prices to customers since August 2020 because of their strong sales outlook.

A large majority of respondents to the survey reported that there was no increase in their workforce. However, the sub-index for employment saw marginal growth. Employment increased for the seventh month in a row, but it was still slower than September.