Saudi Arabia PMI January 2016

Saudi Arabia

Challenging economic conditions weigh on PMI in January

The Purchasing Managers’ Index (PMI) sponsored by Emirates NBD and produced by Markit fell from December’s 54.4 to 53.9 in January. Although January’s reading represented the lowest print in the indicator’s six-and-a-half-year history, the PMI rests above the 50-threshold, which indicates expansion in business activity in the non-oil producing private sector.

January’s result mainly reflected weaker growth in new business, output and employment. According to Emirates NBD, “the slowdown in the non-oil sectors is in line with our expectations as the economy adjusts to lower oil prices and fiscal policy is adjusted accordingly. Global financial market volatility in the first weeks of 2016, and increased concerns about Chinese and global growth are likely to have weighed on sentiment, and may have contributed to the sharp slowdown in new export orders last month.”

FocusEconomics Consensus Forecast panelists see fixed investment falling 0.6% in 2016, which is down 4.9 percentage points from last month’s estimate. For 2017, the panel expects fixed investment to increase 3.5%.

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Saudi Arabia PMI Chart

SaudiArabia PMI January 2016

Note: Emirates NBD Purchasing Managers’ Index. Readings above 50 indicate an improvement in non-oil private sector conditions while readings below 50 point to a deterioration.
Source: Emirates NBD and Markit.

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