Riyadh - Mubasher: Growth in Saudi Arabia’s non-oil private sector slowed to a crawl in April 2018 as business conditions showed the slowest improvement in around nine years.
The drop in the kingdom’s private sector in the fourth month of the year was attributed to a decrease in new orders, coupled with softer production growth and easing job creation, according to a recent survey sponsored by Emirates NBD.
At the price level, production charges tumbled for the third month in a row, and input costs grew at a solid pace, the survey produced by IHS Markit showed.
The seasonally adjusted Emirates NBD Saudi Arabia Purchasing Managers' Index fell to 51.4 last month from 52.8 in March.
“The further softening of the non-oil activity data in April is surprising given the sharply higher oil prices so far this year, as well as the expansionary budget that was announced for 2018,” Head of MENA Research at Emirates NBD Khatija Haque commented.
Output growth declined in the latest survey period, while the expansion rate moved close to the low seen at the beginning of 2018.
Some companies operating in the GCC nation used excess capacity to slash existing backlogs of work, the survey noted.
Employment growth also slowed slightly. Although firms hired “additional local staff” in an effort to put the Saudisation policy of the government into effect, “the rate of job creation was only slight overall, and below its historical average.”
“Demand for goods and services produced in Saudi Arabia deteriorated in April,” the survey added.
It also ascribed the decline in demand for services and goods to competitive pressures, as well as subdued market demand.
Foreign sales levelled down for the third consecutive month, while purchases’ quantities registered a slight increase in April.
