Saudi Arabia PMI

Saudi Arabia

Saudi Arabia: PMI falls to one-year low in May

June 3, 2015

The Purchasing Managers’ Index (PMI) elaborated by the Saudi British Bank (SABB) and HSBC fell from April’s 58.3 to 57.0 in May. Although the index hit a one-year low in May, the PMI remains well above the 50-threshold, indicating an expansion in business activity in the non-oil producing private sector.

May’s result suggests that despite remaining strong, economic dynamics in the non-oil private sector economy softened on the back of political headwinds. The conflict between the Saudi-led coalition against Houthi fighters in Yemen and the recent Islamic State attacks on Shiite mosques in the Kingdom have started to take its toll on business sentiment. According to SABB and HSBC, May’s print reflected weaker growth in output and new orders, with the latter weakening to the lowest level since September 2011. The rate of hiring followed suit and eased to a 10-month low. Conversely, as a result of the still-robust activity, purchases increased at a strong pace in May. Meanwhile, input prices accelerated in May.

FocusEconomics panelists project the economy to grow 3.8% in 2015, which is down 0.4 percentage points from last month’s estimate. For 2016, panelists expect the economy also to grow 3.8%.


Author: Ricard Torné, Lead Economist

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SaudiArabia PMI May 2015 0

Note: HSBC Purchasing Managers’ Index. Readings above 50 indicate an improvement in business conditions while readings below 50 point to a deterioration.
Source: Saudi British Bank and HSBC.


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