RIYADH: Saudi Arabia’s non-oil private sector expanded for a seventh consecutive month in October, with output growth accelerating, although input cost inflation reached its highest level since June.  The Riyad Bank Saudi Arabia Purchasing Managers’ Index, compiled by S&P Global, fell to 54 in October from 55.3 in September. It remained well above the neutral 50 threshold, which separates growth from contraction, and was the second-highest reading since February. Data was collected between Oct. 12 and 22.  This came as shipping disruptions linked to regional conflict continued to affect trade routes, adding to freight and insurance costs for businesses. Saudi Arabia’s ability to redirect oil exports through alternative routes, including the Red Sea, has helped maintain the flow of crude shipments despite disruption to traditional shipping routes.  Naif Al-Ghaith, chief economist at Riyad Bank, said: “Saudi Arabia’s non-oil private sector continued to demonstrate resilience in October, supported by sustained domestic demand, stronger business activity and continued expansion in employment.”  He added: “A particularly encouraging development was the acceleration in business output, which expanded at a robust pace despite a challenging geopolitical environment.”   Non-oil activities up The PMI findings come after preliminary government data showed that Saudi Arabia’s non-oil activities grew 1.9 percent year on year in the third quarter, up from 0.8 percent in the previous quarter. The broader economy contracted 3.8 percent as oil activities fell 20.4 percent, while non-oil activities contributed 1.1 percentage points to annual gross domestic product growth, according to flash estimates from the General Authority for Statistics.  Domestic demand carries growth  Output rose at a robust pace, although it remained below its historical trend. Firms linked the increase to improving underlying demand and greater sales and marketing efforts.  New orders continued to rise strongly, but growth eased from September’s seven-month high and stayed below the series trend. Firms said domestic sales supported order books, while weaker external and trading conditions acted as a drag.  Al-Ghaith said the data suggested that “underlying demand remains positive but is becoming more selective.”  Exports fall for 8th month  Demand remained reliant on the domestic market, as export orders fell for the eighth consecutive month and at a sharper pace. Almost a quarter of respondents reported a decline, citing increased shipping disruption, higher freight and insurance costs, and competitive market conditions.  Hiring slows but continues  Non-oil firms added to their workforces for the fourth consecutive month, although job creation was modest and slower than in September. Backlogs of work rose slightly for a second successive month, reflecting higher sales volumes and some supplier delays.  Purchasing activity rose at a robust pace, with growth the second-fastest since February. Firms also built up input stocks at a solid rate, partly as a buffer against supply disruption.  Suppliers’ delivery times improved only modestly, and to the smallest extent since April, as sea-route disruptions continued to affect deliveries. Some firms responded by sourcing more items locally.  Input costs climb  Cost pressures intensified at the start of the fourth quarter. Purchase prices rose at their fastest pace in six months, with firms citing higher freight, insurance, raw material and energy costs. Staff cost inflation reached its highest rate since February.  In contrast, output price inflation eased to a nine-month low as stronger competition led to greater discounting, although the rate of increase remained solid.  Confidence remains subdued  Geopolitical uncertainty weighed on sentiment, with expectations for future output only mildly positive and below the series average. The report said business confidence was dampened by concerns over geopolitical tensions and rising costs.  “Looking ahead, business expectations remain positive. Overall, October’s PMI results reinforce the resilience of Saudi Arabia’s non-oil private sector,” added Al-Ghaith.