Saudi Arabia PMI December 2020

Saudi Arabia

Saudi Arabia: Non-oil PMI hits a 13-month high in December

January 5, 2021

The Purchasing Managers’ Index (PMI), produced by IHS Markit, increased from 54.7 in November to 57.0 in December, the highest reading in over one year. Consequently, the index moved further above the 50-threshold, indicating improving business activity in the non-oil private sector.

December’s result reflected stronger growth in output and new orders. However, employment continued to fall. Business sentiment improved amid the Covid-19 vaccine rollout, while input costs were unchanged and output cost inflation eased.

David Owen, an economist at IHS Markit, commented:

“The Saudi Arabian non-oil economy is well on the path to recovery, according to December's PMI results, which indicated the strongest output growth since November 2019. Moreover, the PMI is now (just) above its series trend level, suggesting the economy is growing at a relatively normal pace, albeit with a lingering output gap to recover. According to respondents, business activity has been helped by falling Covid-19 case numbers in the fourth quarter of 2020.”

FocusEconomics Consensus Forecast panelists see fixed investment rising 6.3% in 2021, which is unchanged from last month’s estimate. For 2022, the panel expects fixed investment to increase 5.6%.

Author:, Economist

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Saudi Arabia PMI Chart

Saudi Arabia PMI December 20 20

Note: IHS Markit Purchasing Managers’ Index. Readings above 50 indicate an improvement in non-oil private sector conditions over the past month while readings below 50 point to a deterioration.
Source: IHS Markit.

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