Saudi Arabia: Non-oil PMI climbs to 15-month high in March
The Purchasing Managers’ Index (PMI), sponsored by Emirates NBD and produced by IHS Markit, rose from 56.6 in February to 56.8 in March. The result marked the strongest reading since December 2017. Therefore, the index remained well above the 50-threshold that indicates expansion in business activity in the non-oil producing private sector.
Solid domestic market conditions led new orders to expand at the fastest pace since April 2015, while the index output sat at a seven-month high. Despite improving, new orders remained at low levels, highlighting weak global demand. Although strong business activity supported stocks of purchases, job creation was subdued in March. Despite higher input prices, strong competitive pressures caused output charges to decline.
Khatija Haque, head of MENA research at Emirates NBD, commented that:
“The average PMI reading for Q1 2019 was 56.5, indicating the strongest quarterly expansion in the non-oil private sector since Q4 2017. However, the rebound in new orders and business output in recent months has not fed through to job growth, with private sector employment declining for only the third time in the series history last month. There also appears to be very little pricing power for firms, with selling prices declining (albeit only marginally) for the fifth month in a row.”