Saudi Arabia: Non-oil business activity continues to rise in February

The Purchasing Managers’ Index (PMI) sponsored by Emirates NBD and produced by IHS Markit rose from January’s 56.7 to 57.0 in February, the highest value since August 2015. As a result, the index remains comfortably above the 50-threshold that indicates expansion in business activity in the non-oil producing private sector.

February’s improvement reflected a robust expansion in output and new orders, suggesting that activity in the non-oil sector remains robust at the outset of the year. As a result, businesses continue to purchase at solid rates in order to keep up with rising demand and improving prospects for the coming months. Despite the overall improvement, staffing levels grew only slightly. On the price front, higher input prices led to an increase in charges for the fourth month in a row.

FocusEconomics Consensus Forecast panelists see fixed investment rising 1.8% in 2017, which is down 0.8 percentage points from last month’s estimate. For 2018, the panel expects fixed investment to increase 4.1%.