Saudi Arabia: Non-oil PMI edges up from survey-record low in April, but conditions continue to deteriorate
The Purchasing Managers’ Index (PMI), produced by IHS Markit, increased to 44.4 in April from 42.4 in March. Consequently, the index remained below the 50-threshold that indicates an improvement in business activity in the non-oil private sector over the previous month.
April’s result reflected sharp decreases in output, new orders and stocks of purchases due to lockdown measures domestically and abroad. Business activity declined at a survey-record rate, due to closures and tepid demand. New business inflows and exports also decreased notably in April, but the pace of the decline in new work orders moderated slightly from March. Moreover, employment tapered at a quicker rate, due to hiring freezes and redundancies due to lower workloads. Supplier delivery times increased in April, chiefly driven by supply chain disruptions and shortages, which flattered the headline reading as under normal circumstances, an increase in deliver times would reflect upbeat demand, but this was not the case in April.
Tim Moore, Economics Director at IHS Markit, commented that:
“The small minority of Saudi Arabian companies reporting business activity growth in April often linked this to higher spending on healthcare products and services. There were also sporadic reports that a successful shift to online operations had helped to limit the overall decline in new work, especially among service provider.”