Riyadh – Mubasher: Growth in Saudi Arabia's non-oil private sector slowed in March, hitting the lowest rate in around 8 years.
The slowdown reflected the subdued rise in new orders and employment in the third month of 2018, according to a recent survey sponsored by Emirates NBD.
The headline seasonally adjusted Emirates NBD Saudi Arabia Purchasing Managers’ Index (PMI) reached 52.8 in March, down from 53.2 a month earlier.
However, business confidence remained strong in the kingdom’s non-oil private sector and output growth increased, the survey produced by IHS Markit showed.
The survey highlighted that input cost inflation continued to ease from the recent peak registered at the beginning of this year.
“The fall in the pace of expansion in Saudi Arabia’s non-oil private sector to its lowest levels on record last month will prompt firms to continue price discounting in a bid to galvanise demand,” MENA economist at Emirates NBD Daniel Richards said.
Prices of the output remained below the neutral 50.0 level which sets contraction and expansion for the second month running in March, Richards added.
In spite of March sluggish growth, “business optimism at 71.0 remains far above the 12-month average of 61.4,” he noted.
Companies operating in the non-oil private sector reported an increase in output growth, while the incoming fresh business grew at the slowest pace on record in March.
“The expansion was only fractional overall. According to anecdotal evidence, the recent introduction of VAT continued to damp customer demand, whilst panel respondents also commented on competitive pressures,” the survey found.
