Saudi Arabia PMI May 2016

Saudi Arabia

Non-oil economic conditions improve to six-month high in May

The Purchasing Managers’ Index (PMI) sponsored by Emirates NBD and produced by Markit inched up from April’s 54.2 to 54.8 in May, which marked the highest reading since November 2015. As a result of the increase observed in May, the PMI is moving further above the 50-threshold that indicates expansion in business activity in the non-oil producing private sector.

May’s result mainly reflected stronger growth in output and new orders. Job growth, however, remained modest in the same month. Weak salaries and purchasing costs drove total price pressures to ease in May. According to Emirates NBD, “the rise in the Saudi PMI to the highest reading in six months is encouraging, as it shows the resilience of the non-oil economy even in the face of tighter fiscal policy. Domestic demand remains robust, even as export demand has softened.”

FocusEconomics Consensus Forecast panelists see fixed investment falling 0.4% in 2016, which is down 0.3 percentage points from last month’s estimate. For 2017, the panel expects fixed investment to increase 2.9%.

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Saudi Arabia PMI Chart

SaudiArabia PMI May 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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