Saudi Arabia PMI June 2016

Saudi Arabia

Saudi Arabia: Non-oil economic conditions moderate in June

July 11, 2016

The Purchasing Managers’ Index (PMI) sponsored by Emirates NBD and produced by Markit inched down from May’s 54.8 to 54.4 in June. While the PMI remained at historically low levels since the start of the year, the index is still comfortably above the 50-threshold that indicates expansion in business activity in the non-oil producing private sector.

June’s result reflect strong growth in output, new orders and purchasing activity, while job creation remained modest in the same month. Moreover, cost pressures intensified in June, which translated into the first increase in charges since October 2015. Despite low oil prices and less lavish government spending, businesses sentiment in the non-oil sector remains relatively strong. According to Emirates NBD, “firms appear to be increasing operating efficiency, as jobs growth remains sluggish even as activity and new orders are rising.”

FocusEconomics Consensus Forecast panelists see fixed investment falling 0.4% in 2016, which is unchanged from last month’s estimate. For 2017, the panel expects fixed investment to increase 2.9%.

Author: Ricard Torné, Lead Economist

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Saudi Arabia PMI Chart

SaudiArabia PMI June 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 Markit.

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