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.”
Author: Steven Burke, Economist