The report indicates that the sub-components of the PMI presented a mixed picture, with only the output and new orders indices keeping the headline index below the neutral 50.0 mark.

Moreover, it highlighted that business activity and new orders in the non-oil private sector declined significantly in October. 

In related news, the PMI rose above the neutral 50-point mark for the first time since November 2020, increasing from 49.7 in July to 50.4 in August.

Source: S&P Global

Impact of price hikes
 

Firms often see sales decline due to weak market conditions and pressure from rising prices.

Average prices charged by non-oil firms rose solidly, surpassing the series trend for the third consecutive month.

Price hikes are mainly driven by higher input costs, including raw materials and utilities, exacerbated by the strong US dollar’s impact on import prices.

Despite that, overall input cost inflation slowed from September’s six-month high, marking the softest pace since July.

Employment growth
 

According to the report, despite a continued contraction in activity, non-oil businesses expanded staffing levels for the fourth consecutive month, with job creation accelerating to the fastest pace since May.

The report also asserts that firms continued to build inventories to hold items in reserve amid ongoing cost concerns.

Business outlook and confidence
 

The report emphasized that non-oil companies projected an increase in business activity over the next 12 months.

However, the report noted that confidence in future business activity remained weak, with the respective index falling to one of its lowest levels ever.