Saudi Arabia: Non-oil business activity falls to record low in October
November 11, 2016
The Purchasing Managers’ Index (PMI) sponsored by Emirates NBD and produced by IHS Markit fell from September’s 55.3 to 53.2 in October, which represented the lowest value since records began in August 2009. Nevertheless, the index remains comfortably above the 50-threshold that indicates expansion in business activity in the non-oil producing private sector.
Saudi Arabia's October result reflected a weaker expansion in both output and new orders, while jobs growth nearly stalled. Increased competition and weak demand continue to exert downward pressure on costs, which translates into reduced charges to consumers. According to Emirates NBD, “the decline in the Purchasing Managers’ Index in October was not unexpected, given the additional fiscal measures that came into effect last month including public sector wage cuts. External demand also softened further last month.