Riyadh – Decypha: After recording an 18 month high, Saudi Arabia’s non-oil sector Purchasing Managers’ Index (PMI) has started to slowdown, dropping to 56.4 in March 2017, in comparison to February’s 57.0, according to Emirates NBD Saudi Arabia.
However, the same report shows that the average PMI for the first quarter of 2017 (Q1-2017) is 56.7, which is the highest since the third quarter of 2015 (Q3-15).
The slight slowdown is believed to be due to companies raising their payroll numbers only marginally, while input price inflation climbed to a seven-month high.
Even though PMI shows an ease in the expansion rates of the sector, in comparison to the previous month, the above-50.0 reading for the headline index still reflects a steep increase in output, according to Emirates NBD.
“Saudi Arabia's non-oil economy appears to be holding up well amidst ongoing reductions in oil production. Unlike previous periods of expansion however, gains in output and new orders are not being matched by new job growth, while competitive pressures appear to be keeping a lid on the prices firms are able to charge to customers,” commented Tim Fox, Head of Research and Chief Economist at Emirates NBD.
The country’s general economic conditions have been showing continuous signs of improvements, with new projects, expansions in the construction sector, and increase in the level of projects by local companies outside the borders of Saudi Arabia. The report however, continued to highlight on that the rate of job creation is only marginal at this point.
By Decypha Editorial Team
