Saudi Arabia: Non-oil business activity declines to eight-month low in June
July 4, 2017
The Purchasing Managers’ Index (PMI) sponsored by Emirates NBD and produced by IHS Markit declined from May’s 55.3 to 54.3 in June. Although June’s print represents an eight-month low, the index remains comfortably above the 50-threshold that indicates expansion in business activity in the non-oil producing private sector.
June’s print reflected weaker growth in new orders and output compared to the previous month’s result. As a result, firms’ purchasing activity moderated to an all-time low in June. That said, overall economic conditions remain relatively strong, which translates into healthy increases in new payrolls. Khatija Haque, Head of MENA Research at Emirates NBD, highlights that, “the average PMI for H1 2017 stood at 56.0, well above the neutral 50.0 level and signaling a faster rate of non-oil private sector growth than in H1 2016. However, faster non-oil GDP growth this year will likely be offset by contraction in the oil sector this year, following OPEC’s decision to extend output cuts through Q1 2018.”