Saudi Arabia: PMI declines in September
The Purchasing Managers’ Index (PMI) sponsored by Emirates NBD and produced by IHS Markit edged down from 55.1 in August to 53.4 in September. Nevertheless, the index remained above the 50-threshold that indicates expansion in business activity in the non-oil producing private sector.
The deterioration in business conditions reflected subdued growth in output and new orders. Softer demand led firms to hire at slower rates and backlogs of work moderated. On the development of prices, input cost inflation fell to a four-month low, while selling prices fell for the third consecutive month.
Khatija Haque, head of MENA research at Emirates NBD, commented:
“Despite the relative softness in the September survey, the PMI for Q3 was higher than both Q1 and Q2 2018, with output and new work rising at a faster rate than in the first half of this year. However, this did not translate into faster employment growth and staff costs were flat on average in Q3. […] The September survey data points to slower growth in the non-oil private sector in last month, which is surprising given the backdrop of rising oil prices and sharply higher oil production since June. However, we remain optimistic that sustained higher oil production will support faster expansion in the non-oil sectors in Q4.”