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.”