Non-oil private sector activity continued to grow in November on the back of a “sharp rise” in new orders, according to S&P Global’s latest Purchasing Managers’ Index (PMI) (pdf) out this morning. The index dipped slightly to 57.0 from its four-year high 57.7 in October, driven by new orders and a surge in companies’ purchasing activity.

Keep it in context: The PMI is a gauge, and anything above 50.0 means that business conditions are improving and the (non-oil, private-sector) economy is growing.

New orders are booming… Firms purchased inventory at a quickened pace during the month as they “looked to keep robust stock volumes amid strong demand,” according to the PMI. November saw purchasing levels jump to their highest level since July 2019, while inventories saw their “sharpest expansion” in almost six years. Firms were looking “to ensure they were in a good position to take advantage of growth [potential]” as the “strong run of demand growth” continued, said David Owen, senior economist at S&P Global Market Intelligence.

…despite inflation: “At the same time, firms saw another solid increase in purchase prices, which despite softening from October, was the second-quickest since mid-2022,” S&P notes.

But output charges didn’t change much: Some firms raised their prices, but this was leveled out by other companies opting to continue marking down their prices, resulting “in broadly stable aggregate output prices.”

Rising order volumes supported higher output — as well as backlogs: Output accelerated at the fastest pace since June, while backlogs also increased during the month after dipping for the first time in 28 months in October.

Looking ahead: Business optimism remains strong among surveyed firms, which signaled they expect activity to continue rising in the months ahead, although overall confidence levels have weakened “mainly due to concerns at some companies that competitive pressures could erode market share.”

FROM OUR NEIGHBORHOOD-

Egypt’s PMI remained in contraction territory in November, albeit at a softer pace, with the index rising to 48.4 in November, according to the PMI (pdf). November’s reading follows months of deepening contraction, which pushed the index to its sharpest deterioration in five months to 47.9 in October.

Saudi activity expansion cools: Growth in the kingdom’s non-oil private sector slowed last month, with the headline PMI falling to 57.5 in November from October’s four-month high of 58.4, according to S&P’s report (pdf). The dip comes on the back of a slowdown in export demand and inflationary pressures, according to S&P.

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