Saudi Arabia PMI

Saudi Arabia

Saudi Arabia: PMI slides to record low in October but remains positive

November 3, 2015

The Purchasing Managers’ Index (PMI) sponsored by Emirates NBD and produced by Markit fell from September’s 56.5 to 55.7 in October, the lowest reading in the indicator’s history. However, the PMI still rests comfortably above the 50-threshold, which indicates expansion in business activity in the non-oil producing private sector.

October’s result mainly reflected a slowdown in expansion of output, employment and new orders, which rose at the slowest rate since the series began. Meanwhile, job creation in the non-oil private sector was observed in October, albeit at the slowest rate in three months. Similarly, backlogs of work also accumulated at the weakest pace in over a year. According to Emirates NBD, “the October PMI data points to a slower rate of growth in the non-oil private sector as we head into the fourth quarter, which is unsurprising in the context of sharply lower oil revenues and tighter liquidity conditions. However, the rate of expansion in the non-oil sector is still relatively robust, and overall GDP growth will also be underpinned by higher oil production this year.”

FocusEconomics panelists project the economy to grow 3.2% in 2015, which is unchanged from last month’s estimate. For 2016, panelists expect the economy also to grow 1.9%, which is also unchanged from last month’s forecast.

Author: Ricard Torné, Lead Economist

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Saudi Arabia PMI Chart

SaudiArabia PMI October 2015

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 Markit.

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