Saudi Arabia: Non-oil PMI ticks down in March, but remains upbeat nonetheless
The Purchasing Managers’ Index (PMI), produced by IHS Markit, fell from 53.9 in February to 53.3 in March. That being said, the index remained comfortably above the 50-threshold, where it has been for the past seven months, indicating improving business activity in the non-oil private sector.
March’s loss of momentum reflected weaker growth in new orders, which increased at the weakest pace in five months due to cautious spending among firms due to uncertainty over the evolution of the pandemic. Nonetheless, output growth was upbeat as companies looked to run down backlogs of work and consequently, outstanding work fell at the quickest pace since June 2020. Employment conditions were largely stable in March, contrasting falling head counts in February. On the price front, input prices continued to rise, while output prices fell.
David Owen, an economist at IHS Markit, commented:
“March PMI data pointed to weaker growth in non-oil business conditions in Saudi Arabia, suggesting a cooling off in the economic recovery since the start of the year. With strong sales growth revealed in January data, though, we should still see an improvement in business activity reflected in official data for the first quarter of 2021. The quarterly PMI average of 54.8 was the highest since the end of 2019, but still weak compared to much of the series.”