Riyadh – Mubasher: Saudi Arabia’s non-oil private sector firms have seen a weak performance in January, on the back of sluggish output growth from November’s ten-month peak, Emirates NBD said in its latest Saudi Arabia PMI survey.
The kingdom’s Purchasing Managers’ Index’s (PMI) hit 53 points in January, down from 57.3 points in December 2017.
The introduction of the value added tax (VAT) adversely impacted output growth in January, the report showed.
On the other hand, reports from non-oil companies noted that effect of applying the VAT on sales was transitory.
“The softness in the January PMI survey was fairly broad-based, with faster employment growth being the main highlight. Wage increases, fuel subsidy cuts and the introduction of VAT is evident in the higher input costs and staff costs components of the survey in January,” Head of MENA Research at Emirates NBD Khatija Haque said.
“However, firms were the most optimistic about their prospects in the coming 12 months than they have been since May 2017,” Haque added.
The report highlighted that weaker business activity rates and new order growth were the key factors that weighed on the headline PMI in January.
"January data indicated a robust and accelerated rise in average cost burdens across the non-oil private sector economy. The latest increase in overall input prices was the fastest since July 2014," the report concluded.
