Saudi Arabia PMI July 2016

Saudi Arabia

Non-oil economic conditions jump to an eight-month high in July

The Purchasing Managers’ Index (PMI) sponsored by Emirates NBD and produced by IHS Markit rose from June’s 54.4 to 56.0 in July. The PMI hit its highest level since November 2015 and, therefore, the index is still comfortably above the 50-threshold that indicates expansion in business activity in the non-oil producing private sector.

July’s result reflected that job creation, output and new orders all expanded at a faster rate than in the previous month. Purchasing activity also increased more rapidly. Cost pressures were relatively stable in July, which translated into unchanged charges to clients. According to Emirates NBD, “July’s survey is encouraging as it suggests Saudi Arabia’s non-oil economy continues to expand at a healthy clip. Growth momentum is slower than last year, but is holding up better than many had expected in an environment of low oil prices.”

FocusEconomics Consensus Forecast panelists see fixed investment falling 0.7% in 2016, which is down 0.3 percentage points from last month’s estimate. For 2017, the panel expects fixed investment to increase 3.1%.

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Saudi Arabia PMI Chart

SaudiArabia PMI July 2016 0

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 IHS Markit.

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