Saudi Arabia's non-oil economy saw its fastest job growth in nine years in October, pointing to an improvement in business conditions as the world's top oil exporter seeks to diversify.
The Riyad Bank's purchasing managers' index rose to 58.4 last month from 57.2 in September, supported by "strong new business growth" and "significant expansion in activity."
The measure was well above the 50 mark separating growth from contraction and "indicates a significant improvement in the health of the kingdom's economy."
The bank said in a statement that strong labor market conditions had helped a faster wage increase, adding to input cost pressures as purchase price inflation also accelerated.
Nayef al-Ghaith, chief economist at Riyad Bank, said the expansion of employment was a promising sign for the Saudi economy, as it signaled growing demand for labor and a potential improvement in the labor market.
However, companies cut selling prices for the second month in a row, amid other reports that strong competition has eroded market share.
The statement said that commercial activity continued to grow at a remarkable rate at the beginning of the fourth quarter of this year, in response to increasing customer demands and improving economic conditions, adding that the non-oil economy companies - which were included in the bank's study - reported a sharp increase in new incoming business, with the expansion rate improving to its highest level in 4 months.
Growth in production and new business remained broad-based in the manufacturing, construction, wholesale and retail trade and services sectors.
Saudi Arabia's $1.1 trillion economy suffered its biggest contraction since 2020 in the third quarter, after the kingdom cut oil production in July in a bid to lift global crude prices.
On Wednesday, data from Saudi Arabia's finance ministry showed the kingdom posted a budget deficit of 35.8 billion riyals ($9.54 billion) in the third quarter.