Riyadh – Mubasher: Saudi Arabia’s non-oil private sector economy has sustained its healthy improvement in June 2017, but has also lost its growth momentum, according to the Emirates NBD Saudi Arabia Purchasing Managers’ Index (PMI) survey on last month.
Companies in the sector remained optimistic towards the twelve-month outlook for output, despite confidence dropping to an eight-month low.
The headline PMI fell to an eight-month low of 54.3 in June from 55.3 in May, in line with a marked, but slower improvement in business conditions. Observed purchasing activity was the weakest since August 2009. On a quarter-to-quarter basis, the average performance in the second quarter of 2017 was weaker than the previous one.
Commenting on the survey, Khatija Haque, head of MENA Research at Emirates NBD, said: “The average PMI for the first half of 2017 stood at 56.0, well above the neutral 50.0 level and signalling a faster rate of non-oil private sector growth than in H1-16. However, faster non-oil GDP growth this year will likely be offset by contraction in the oil sector this year, following OPEC’s decision to extend output cuts through Q1-18.”
Operating conditions improved as business wins surged, due to favourable economic conditions, strong underlying demand, and more construction projects, a press release stated.
The survey, sponsored by Emirates NBD and produced by IHS Markit, stated that new orders and output both increased, but had done so at their weakest rate in eight months. A new increase in export orders – after two months of contractions – came as a result of buying growth softening to its weakest rate since the survey’s inception.
Average selling prices rose as cost inflation slightly edged up, leaving behind May’s survey-record low.
Payroll numbers increased at their fastest rate since August 2016, but job creation was only slight.
