Saudi Arabia PMI September 2016

Saudi Arabia

Saudi Arabia: Non-oil business activity receded in September from August's one-year high

October 5, 2016

The Purchasing Managers’ Index (PMI) sponsored by Emirates NBD and produced by IHS Markit fell from August’s one-year high of 56.6 to 55.3 in September. Nevertheless, the index remains comfortably above the 50-threshold that indicates expansion in business activity in the non-oil producing private sector.

September’s result reflected a weaker expansion in both new business and job creation, whereas output continued to expand at a healthy pace. Increased competition drove both purchase costs and charges to moderate in September. According to Emirates NBD, “Saudi Arabia’s PMI eased only slightly in September, on weaker new order growth. However, the average PMI for Q3 2016 points to a faster rate of expansion in economic activity compared to the first half of this year. Recent announcements on spending cuts in the Kingdom are likely to weigh on household consumption and consumer confidence however, as we head into Q4.”

FocusEconomics Consensus Forecast panelists see fixed investment falling 0.7% in 2016, which is unchanged 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 September 2016

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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