Saudi Arabia PMI August 2016

Saudi Arabia

Saudi Arabia: Non-oil business activity jumps to one-year high in August

September 5, 2016

The Purchasing Managers’ Index (PMI) sponsored by Emirates NBD and produced by IHS Markit rose from July’s 56.0 to 56.6 in August. The PMI hit its highest level in a year, keeping it comfortably above the 50-threshold that indicates expansion in business activity in the non-oil producing private sector.

August’s result reflected that output and new orders expanded at a strong rate. Employment and purchasing activity also increased more rapidly compared to July. Cost pressures resurfaced in August, which translated into an increase in charges to clients. According to Emirates NBD, “the rise in the Emirates NBD Saudi Arabia PMI to the highest level in a year is encouraging, although we note that the average PMI so far this year is still below 2015, indicating a slower rate of private sector growth. […] Record high oil production in July and August likely supported activity in the manufacturing sector over the summer.”

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%.

Author: Ricard Torné, Lead Economist

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Saudi Arabia PMI Chart

SaudiArabia PMI August 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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