Saudi private sector maintains growth, but employment declines: PMI

Underpinned by stronger increases in new orders and output across the non-oil private sector, the Emirates NBD Saudi Arabia Purchasing Managers’ Index (PMI) climbed to 56.8 in March, from February’s 56.6.

The latest reading was the highest since December 2017 and indicated one of the strongest growth performances over the past three-and-a-half years, the survey found.

“The average PMI reading for Q1 2019 was 56.5, indicating the strongest quarterly expansion in the non-oil private sector since Q4 2017,” said Khatija Haque, Head of MENA Research at Emirates NBD.

“However, the rebound in new orders and business output in recent months has not fed through to job growth, with private sector employment declining for only the third time in the series history last month,” she added. 

Also read: Saudi PMI hits 2-year high on new order growth

March saw the rate of new business growth accelerate for the fifth time in the past six months to the highest since April 2015.

Surveyed firms reported that the upturn largely reflected stronger market conditions, with greater sales efforts, improving product offerings and competitive pricing also helping to attract customers.

New export orders rose for the first time in three months but only marginally, indicating that the main impetus continued to come from domestic sources.

The output of goods and services across the non-oil private sector likewise increased at a faster rate in March.

Growth in output was at a seven-month high, though still below the historical series average (since 2009). Higher business activity in turn saw companies raise their buying levels and boost stocks of purchases.