Saudi Arabia: Non-oil PMI rises in August
The Purchasing Managers’ Index (PMI), produced by IHS Markit, rose from July’s 56.6 to 57.0 in August. Although the index remained above the 50-threshold that indicates expansion in business activity in the non-oil producing private sector, it was below the long-term survey average of 57.6.
August’s reading reflected an acceleration in overall new order growth, mainly due to solid domestic books. Robust demand translated into an increase in overall output and stronger purchasing activity. Conversely, job creation remained weak in the month. Although input prices pressures were mild in August, output charges increased, “in order to account for improvements in product quality.”
Looking forward, Amritpal Virdee, Economist at IHS Markit, commented that:
“The survey’s forward-looking gauge, the Future Output Index, rose to a three-month high on the back of new product initiatives and positive forecasts for underlying demand. […] August PMI data for Saudi Arabia revealed a stronger improvement in economic conditions and when combined with the relatively solid expansion seen in July, should help support a faster quarter-on-quarter expansion for the third quarter of 2019.”