The Riyad Bank Purchasing Managers’ Index report on Wednesday showed slight growth in Saudi Arabia’s non-oil private sector during August, with business activity expanding at a slightly faster pace than in July and an increase in new orders.

The seasonally adjusted index rose to 56.4 in August from 56.3 in July, remaining well above the 50 level that indicates growth.

Naif Al-Ghaith, Chief Economist at Riyad Bank, said the increase indicates another month of steady growth, driven by improved demand conditions, a modest recovery in production growth, and further gains in employment.

He added that although activity growth has slowed from its peak earlier this year, the underlying trend remains strongly positive.

New orders accelerated, supported by improved economic conditions, while new export orders also rebounded, driven by marketing activities and cooperation within the Gulf Cooperation Council (GCC) region, marking the fastest rise in four months.

The new orders sub-index rose to 60.1 in August from 59.7 in July.

Employment continued to grow, albeit at a slightly slower pace than in previous months, as companies expanded sales teams and started new projects. Inventory growth reached its highest level in four months in response to increased orders.

The survey showed companies raised selling prices for the third consecutive month and faced sharp increases in production input costs, driven by rising purchase costs and global inflationary pressures.

Business confidence improved from its lowest level in 12 months in July, and the outlook for future production strengthened, indicating positive sentiment among non-oil private sector companies.