Saudi Arabia: PMI inches up in October
November 5, 2018
The Purchasing Managers’ Index (PMI) sponsored by Emirates NBD and produced by IHS Markit edged up from 53.4 in September to 53.8 in October. Therefore, the index remained above the 50-threshold that indicates expansion in business activity in the non-oil producing private sector.
The improvement in business conditions reflected stronger growth in both domestic and foreign new orders, which, in turn, boosted job creation and stocks of purchases. Although the all-important output category expanded in October, the pace of growth was the slowest since April. On the development of prices, although input costs declined in October, output prices increased for the first time in four months.
Regarding future developments, Khatija Haque, head of MENA research at Emirates NBD, commented:
“Business optimism about future output increased markedly in October, with nearly half of all firms surveyed expecting their output to be higher in a year’s time, while the other half expected current levels of output to be sustained. The rise in Brent oil prices to over USD 80/b on average last month – the highest level since October 2014 - likely contributed to improved business sentiment, and the government also signalled increased budget spending in 2019 in its pre-budget statement released in October.”
Saudi Arabia Fixed Investment Forecast
FocusEconomics Consensus Forecast panelists see fixed investment rising 4.3% in 2019, which is unchanged from last month’s estimate. For 2020, the panel expects fixed investment to increase 5.4%.