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Saudi Arabia PMI March 2024

Saudi Arabia: Non-oil PMI declines in March, remains upbeat

The Riyad Bank Non-oil Purchasing Managers’ Index (PMI) fell to 57.0 in March from 57.2 in February. As a result, the index remained above the 50.0 no-change threshold, but signaled a softer improvement in non-oil private sector operating conditions compared to the previous month.

The key drivers behind the latest PMI reading include a sharp expansion in business activity, which reached a six-month high due to robust increases in order books and new customers. This upturn led to a faster rate of purchasing activity growth and another round of staff hiring. Additionally, there was a notable acceleration in new orders for the second consecutive month, supported by strong demand conditions and an improvement in demand from foreign customers, marking the first instance of sustained month-on-month growth since mid-2023.

Meanwhile, there was a further softening of cost pressures, especially on wages, with the rate of input cost inflation slowing to the lowest seen for eight months. In addition, average selling prices rose modestly in March, albeit at a quicker pace than in February, as firms responded to stronger client demand and competitive pressures. Finally, business expectations for the coming 12 months were positive, registering the strongest level of confidence since last November, indicating an optimistic outlook for future business conditions.

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