A Saudi trader observes the stock market on monitors at Falcom stock exchange agency in Riyadh, Feb. 7, 2018. Photo: Reuters / Faisal Al Nasser.

Growth in Saudi Arabia’s non-oil private sector edged up in August to its fastest rate this year, a survey of companies showed on Tuesday, suggesting a long-awaited recovery of the economy may have begun.

The economy has been hit hard in the last few years by low oil prices and government austerity, but the International Monetary Fund predicts it will start picking up this year as state spending and oil output increase.

The corporate survey indicated that process may now be underway. The seasonally adjusted Emirates NBD Saudi Arabia Purchasing Managers’ Index rose to 55.1 last month from 54.9 in July; a level above 50 indicates expansion.

Output growth accelerated to 59.7 from 58.8, while growth of new orders climbed to 59.0 from 58.5. Employment growth slowed marginally, however, to 51.0.

Khatija Haque, head of regional research at Emirates NBD, said the survey data showed non-oil private sector growth had accelerated in the last three months, but noted that the average PMI reading so far this year was still the slowest since the survey was launched in August 2009.

“Employment growth was also relatively modest in August, with just 2 percent of firms surveyed reporting increased hiring,” she added.

Some firms said domestic demand was supported by promotional activity such as discounts; output prices fell outright for a second straight month in August even as input price inflation remained positive, Haque said.

However, companies were on balance optimistic about their future output, with 17 percent expecting their output to be higher in a year’s time — although this was a slightly lower proportion than in July, she added.