Riyadh – Mubasher: Saudi Arabia’s non-oil private sector has registered the highest growth this year in June, a recent survey sponsored by Emirates NBD showed on Tuesday.
The survey, which is produced by IHS Markit, attributed the non-oil private sector’s rebound to an increase in new order and higher output.
The seasonally adjusted Emirates NBD Saudi Arabia Purchasing Managers’ Index (PMI) rose to 55 points last month, compared to 53.2 points in May. A reading above 50 indicates expansion, while a reading below that signals contraction.
In April, the PMI fell to its lowest level since the survey launch in 2009 as private businesses were contracted by the introduction of a 5% value-added tax (VAT) and the hike of fuel prices at the beginning of the year.
“The rise in the headline PMI to the highest level this year reflects a strong recovery in new orders (including export orders) and output. Firms had been anticipating this for several months, as reflected in the very strong ‘future output’ readings since February,” head of regional research at Emirates NBD Khatija Haque said.
In the same vein, it indicated that output growth accelerated in June, which marks the end of the second quarter, with the latest expansion was at the strongest pace since December 2017.
Companies in the kingdom’s non-oil private sector ascribed higher output to robust inflows of new business and the improving market condition.
“New orders in Saudi Arabia improved at the fastest rate in six months during June. New business was sourced from both domestic and foreign sources, with the latter returning to growth for the first time since January during the most recent survey,” the survey added.
On the flipside, the rate of job opportunities creation fell during June, in spite of a strong rise in new orders and work outstanding.
“Despite the upturn in business conditions, optimism towards future growth prospects eased to a nine-month low, and was much weaker than seen in the previous month,” the survey concluded.
