Saudi Arabia: Non-oil PMI falls in February, but remains upbeat nonetheless
The Purchasing Managers’ Index (PMI), produced by IHS Markit, fell from 57.1 in January—the highest reading since November 2019—to 53.9 in February. Consequently, the index remained comfortably above the 50-threshold, where it has been for the past six months, indicating improving business activity in the non-oil private sector.
February’s loss of momentum reflected weaker growth in output and new orders. Moreover, employment conditions remained subdued as firms lowered head counts for the third straight month in February. Meanwhile, business optimism dropped to the lowest level since October 2020 due to a tougher than expected start to 2021 amid ongoing lockdowns in most parts of the world. On the price front, both input and output prices continued to rise at a marginal pace.
David Owen, an economist at IHS Markit, commented:
“Staff numbers continued to lag the recovery, however, as firms are yet to see additional pressure on business capacity. That said, barring the slight increase in employment last November, the rate of job shedding was the softest recorded for ten months.”