Saudi Arabia PMI December 2018

Saudi Arabia

Saudi Arabia: PMI moderates in December

January 10, 2019

The Purchasing Managers’ Index (PMI), sponsored by Emirates NBD and produced by IHS Markit, fell from 55.2 in November to 54.5 in December. Nevertheless, the index remained well above the 50-threshold that indicates expansion in business activity in the non-oil producing private sector.

The deterioration in business conditions reflected weaker growth in output, albeit it remained comfortably above the 2018 average. Growth in new orders softened in December, mostly due to subdued external demand. As a result, employment growth remained weak as it did purchasing activity. Strong competitive pressures continued to squeeze margins, while input prices increased due to higher equipment and raw materials prices.

Looking forward, Khatija Haque, head of MENA research at Emirates NBD, commented that:

“Business optimism remains strong in Saudi Arabia, and the future output index climbed to the highest reading in five years. 53.8% of respondents expect that output will be higher in 12 months’ time, with no firms expecting a deterioration in conditions.”

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%.


Author: Ricard Torné, Lead Economist

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Saudi Arabia PMI December 2018

Note: Emirates NBD Purchasing Managers’ Index. Readings above 50 indicate an improvement in non-oil private sector conditions while readings below 50 point to a deterioration.
Source: Emirates NBD and IHS Markit.


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