Saudi Arabia: PMI inches up in August
September 3, 2018
The Purchasing Managers’ Index (PMI) sponsored by Emirates NBD and produced by IHS Markit edged up to 55.1 in August from 54.9 in July. As a result, the index remained above the 50-threshold that indicates expansion in business activity in the non-oil producing private sector.
The slight improvement in business conditions came on the back of stronger new orders and output growth. Stronger inflows of new business were supported by robust domestic demand, whereas export orders only picked up marginally. However, employment growth eased to a three-month low, while staff wages were relatively unchanged. Meanwhile, purchasing activity ramped up, while inventories rose at a similar pace to last month. Outstanding business also increased, with some firms noting output being designated to ongoing projects and new orders being added to the backlogs of work.
On the development of prices, input cost inflation was unchanged from July, while selling prices fell for the second consecutive month, as firms used promotional activity to attract new business.
Khatija Haque, head of MENA research at Emirates NBD, commented:
“The survey data suggests that the pace of non-oil private sector growth in the Kingdom has accelerated in the last three months, relative to the first five months of the year. Nevertheless, the rate of expansion so far in 2018, measured by the average PMI reading for January through August, is markedly weaker than for the same period last year, and in fact the slowest on record.”
Author: Lindsey Ice, Economist