Saudi Arabia: Non-oil PMI declines to five-month low in December
January 5, 2020
The Purchasing Managers’ Index (PMI), produced by IHS Markit, declined from November’s 58.3 to 56.9 in December. The print represented the lowest value in five months. Nevertheless, the index remained above the 50-threshold that indicates an improvement in business activity in the non-oil producing private sector.
December’s result reflected weaker expansions in both output and new orders, which weighed on job creation. Purchasing activities, however, increased in the month on the back of still solid new orders and efforts to boost inventories. On the price front, a weak increase in salaries allowed input costs to increase only marginally.
Looking forward, Tom Moore, Economics Associate Director at IHS Markit, commented that:
“The survey continues to indicate a much stronger improvement in business conditions than at the same time during 2018, particularly in relation to new order books. Latest data also suggests that non-oil firms in Saudi Arabia are confident about the outlook for 2020, with business optimism holding at a much higher level than seen in the middle of last year."