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April 4 (Reuters) – Saudi Arabia’s non-oil business activity continued to expand at a strong rate in March, a monthly survey showed, boosted by an increase in new orders, although the pace of growth softened from the previous month.

The seasonally adjusted Riyad Bank Saudi Arabia Purchasing Managers’ Index eased to 58.7 in March, firmly over the 50 mark which separates growth from contraction, but down from 59.8 in February, the highest reading in almost eight years.

The New Orders sub-index eased to 66.4 in March after surging to 68.7 the previous month but signals continued strong demand, with demand from foreign firms particularly strong.

“Business conditions remain strongly positive at the end of the first quarter of 2023 as improving market conditions and increased development spending helped to boost demand in the non-oil private sector,” said Naif Al-Ghaith, Riyad Bank’s chief economist.

Accordingly, the Output sub-index also recorded strong growth, albeit nudging back to 64.2 in March from 65.6 in February.

Employment growth remained strong in March as companies increased staffing levels.

Unemployment in Saudi Arabia among citizens fell to 8% in the fourth quarter of 2022, down from 9.9% the previous quarter, according to data released last week.

Job creation is a key part of the Vision 2030 economic agenda to cut reliance on oil. Expansion of the non-oil private sector is also a top objective of the transformative strategy, spearheaded by Crown Prince Mohammed bin Salman.

Companies continued to signal confidence of a rise in business activity over the next year in the latest survey.

Reporting by Rachna Uppal; Editing by Toby Chopra

Our Standards: The Thomson Reuters Trust Principles.

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