Saudi Arabia: Non-oil PMI climbs to over one-year high in May
June 10, 2019
The Purchasing Managers’ Index (PMI), sponsored by Emirates NBD and produced by IHS Markit, rose from April’s 56.8 to 57.3 in May. The print represented the highest reading since January 2018. Therefore, the index remained well above the 50-threshold that indicates expansion in business activity in the non-oil producing private sector.
May’s reading reflected healthy expansions in output and new orders. Moreover, purchasing activity accelerated in the same month in order to support stronger production requirements. Despite the increase in business activity across Saudi Arabia’s non-oil private sector, private sector employment remained lackluster. Selling prices posted an increase for the first time in seven months in May and was mostly led by higher costs and solid demand.
Looking forward, Khatija Haque, head of MENA research at Emirates NBD, commented that:
“The gradual rise in the headline PMI this year suggests that growth in the kingdom’s non-oil private sector is recovering after a relatively soft 2018. Other indicators, such as an improvement in private sector credit growth and rising point of sale transactions in the first quarter of this year are consistent with a modest rebound in private sector activity.”
Saudi Arabia Fixed Investment Forecast
FocusEconomics Consensus Forecast panelists see fixed investment rising 2.7% in 2019, which is up 0.1 percentage points from last month’s estimate. For 2020, the panel expects fixed investment to increase 3.8%.