Saudi Arabia: Non-oil business activity ends year on solid footing
January 4, 2018
The Purchasing Managers’ Index (PMI) sponsored by Emirates NBD and produced by IHS Markit inched down from 57.5 in November to 57.3 in December. As a result, the index remains above the 50-threshold that indicates expansion in business activity in the non-oil producing private sector.
Despite the marginal decrease, the non-oil sector expanded above the 2017 average, with output and new orders showing strong performances. Saudi Arabia is benefiting from robust domestic demand and rising new orders from the region. Healthy activity translated into firms hiring additional staff in December. Although input prices increased significantly in December, selling prices only rose at a marginal pace due to strong competitive pressures. Khatija Haque, Head of MENA Research at Emirates NBD, adds that, “the December PMI survey continued to show a strong rate of expansion in December, and the data suggests that non-oil growth accelerated in the final quarter of 2017, as well as for the year as a whole compared to 2016. Nevertheless, we expect headline GDP growth to be close to zero in 2017 as substantial oil production cuts will offset the expansion in the non-oil sectors of the economy. We are more optimistic about growth prospects in 2018 however.”