Saudi Arabia: Non-oil PMI jumps to six-month high in June
The Purchasing Managers’ Index (PMI) sponsored by Emirates NBD and produced by IHS Markit rose from 53.2 in May to 55.0 in June. June’s print represented the highest reading so far this year. Therefore, the index remains above the 50-threshold that indicates expansion in business activity in the non-oil private sector.
June’s increase was driven by stronger output growth and a healthy expansion in new orders. Solid growth momentum translated into higher backlogs of work. Despite the overall improvement, job creation increased only marginally. On the price front, higher prices for raw material boosted input prices faced by Saudi companies. That said, output charge inflation declined due promotional activities in June.
Khatija Haque, Head of MENA Research at Emirates NBD, added that:
“The rise in the headline PMI to the highest level this year reflects a strong recovery in new orders (including export orders) and output. Firms had been anticipating this for several months, as reflected in the very strong ‘future output’ readings since February. It isn’t surprising then that the future output index declined sharply in June, with most firms now expecting their output to be relatively stable over the next twelve months.”