Riyadh – Mubasher: Saudi Arabia’s non-oil private sector continued to expand in May, suggesting a gradual recovery after a soft performance in 2018, according to a report compiled by IHS Markit for Emirates NBD.
The seasonally adjusted Emirates NBD Saudi Arabia Purchasing Managers' Index (PMI) advanced to a 17-month high of 57.3 points in May, compared to 56.8 points in April, powered by an acceleration in output growth. A reading above 50 indicates expansion, while a reading below that signals contraction.
“The gradual rise in the headline PMI this year suggests that growth in the kingdom’s non-oil private sector is recovering after a relatively soft 2018. Other indicators, such as an improvement in private sector credit growth and rising point of sale transactions in the first quarter of this year are consistent with a modest rebound in private sector activity,” Khatija Haque, head of MENA Research at Emirates NBD, commented.
The job creation pace across the kingdom’s non-oil private sector remained “lacklustre” in the fifth month of 2019, however, output across the non-oil private sector hit all levels high since December 2017, supported by stronger underlying demand conditions, according to reports from surveyed businesses.
Similarly, inflows of new business increased sharply over the course of the month with the rate of growth reaccelerating and running at one of the fastest seen over the past four years, reflecting a further growth in export orders, which rose at the quickest pace since February 2017, the report found.
Firms operating in the GCC nation’s non-oil private sector scaled up their purchasing activity during May in a bid to support increased output requirements.
The report highlighted that confidence among non-oil private sector firms towards future output remained robust in May on the back of positive forecasts for underlying economic conditions and plans for improved products and services.
On the other side of the spectrum, the degree of optimism eased last month since April, when it saw the highest level in five years.
