Saudi Arabia: Non-oil business activity slows to six-month low in May
June 5, 2017
The Purchasing Managers’ Index (PMI) sponsored by Emirates NBD and produced by IHS Markit declined from April’s 56.5 to 55.3 in May. Despite May’s moderation, the index remains comfortably above the 50-threshold that indicates expansion in business activity in the non-oil producing private sector.
May’s print reflected weaker growth in new orders and output compared to the previous month’s result. As a result, firms’ purchasing activity also moderated in May, with growth in input buying falling to a 13-month low. That said, overall economic conditions remain relatively strong, which translates into healthy increases in new payrolls. Tim Fox, Head of Research and Chief Economist at Emirates NBD, warns that, “while the non-oil sector has seen stronger growth so far this year compared to 2016, the downside risks to overall GDP growth have increased with the extension of OPEC’s production cuts for a further 9 months.”