Saudi Arabia: Non-oil PMI moderates in October, but remains healthy nonetheless
November 4, 2021
The Purchasing Managers’ Index (PMI), produced by IHS Markit, ticked down from 58.6 in September to 57.7 in October. Consequently, the index remained above the 50-threshold, indicating a more moderate improvement in business activity in the non-oil private sector relative to the month prior.
October’s deceleration reflected weaker growth in new orders, but demand remained strong due to looser Covid-19 restrictions and stronger foreign demand in the month. Meanwhile, output growth accelerated in October relative to the previous month, while employment levels increased after stagnating in September.
David Owen, an economist at IHS Markit, commented on the current price dynamics among suppliers:
“The rate of purchase cost inflation sharpened during October, giving further signs that rising commodity prices are feeding through to firms' balance sheets. With confidence towards sales prospects running strong, businesses were able to pass on costs to customers with the quickest rise in output prices since August 2020.”
Author: Steven Burke, Economist