Saudi Arabia: Non-oil PMI ticks down in June, conditions continue to worsen
The Purchasing Managers’ Index (PMI), produced by IHS Markit, decreased to 47.7 in June from 48.1 in May. Consequently, the index remained below the 50-threshold, indicating worsening business activity in the non-oil private sector over the previous month.
June’s result reflected faster deteriorations in output, new orders and employment compared to May. Disruptions to business operations and capacity constraints kept the index below its pre-pandemic levels, and some firms highlighted declining workloads, which coupled with lower business confidence weighed heavily on employment levels.
On the price front, despite disruptions to supply chains, input prices fell in June, while firms continued to discount selling prices to spur demand.
Tim Moore, Economics Director at IHS Markit, commented that:
“Subdued domestic demand and a sharp drop in export sales led to additional price discounting in June. Average prices charged have now dropped for five months in a row and the resulting squeeze on margins has led to more widespread cost cutting initiatives across the private sector.”