Saudi Arabia: Non-oil PMI posts weakest reading since December 2018 in January
February 4, 2020
The Purchasing Managers’ Index (PMI), produced by IHS Markit, moderated from December’s 56.9 to 54.9 in January. The print represented the lowest value in thirteen months. Nevertheless, the index remained above the 50-threshold that indicates an improvement in business activity in the non-oil producing private sector over the previous month.
January’s result reflected weaker expansions in new orders, as wary customers and strong competition weighed on sales. Purchasing activities, increased in the month but were significantly subdued, while export sales dipped. On the price front, a weak increase in salaries allowed input costs to remain virtually stable, while output prices ticked up modestly.
Tim Moore, Economics Associate Director at IHS Markit, commented that:
“Non-oil firms in Saudi Arabia are optimistic about the business outlook for 2020, but levels of confidence have dropped since December, which acted as a brake on staff hiring and input buying at the start of the year."
Author: Steven Burke, Economist