Business activity in Saudi Arabia's non-oil private sector rose to a series record in January but also saw input price inflation climb to its highest level, according to a recent survey by the Saudi British Bank (SABB).

SABB HSBC in its Saudi Arabia Purchasing Managers’ Index (PMI), said the latest reading signalled a substantial and accelerated improvement in the health of the Saudi's non-oil producing private sector.

The PMI, which measures the economic performance of Saudi non-oil producing private sector companies and establishments, climbed to a record peak of 63.8 in January, from 61.3 in December.

The non-oil private sector activity rose at a series record pace last month, supported by an unprecedented rise in new business, the report added.

The monthly report by SABB and HSBC reflects the Kingdom's economic performance through the monitoring of a number of variables, including output, new orders, exports, input prices, output prices, quantity of purchases, stocks and employment.

Incoming new work grew rapidly, which panel members linked to a combination of beneficial economic conditions, good demand, promotional work and strong company reputations.

Data showed that both domestic and export markets were significant contributors to January’s expansion of total new orders, although the former remained the leading factor.

Saudi Arabian non-oil private sector firms posted a thirteenth successive build up of unfinished work at their units in January. Outstanding business accumulated at a solid and accelerated pace as new order levels rose, the PMI said.

Firms expanded capacity in January, responding to greater current and expected business requirements.

According to the PMI, the employment, buying activity and stocks witnessed a major surge last month.

The staffing grew solidly, albeit at a marginally weaker rate than in December, while both purchases and input stocks rose at near series record rates, the report stated.

Average vendor performance continued to improve at the start of 2011, despite stronger demand for inputs, it added.-TradeArabia News Service