Saudi PMI shows solid Q2 start for non-oil private sector: ENBD

Saudi Arabia’s non-oil private sector saw strong growth in both output and new orders at the start of the second quarter, according to the latest survey by Emirates NBD released on Sunday.

Saudi Arabia’s Purchasing Managers’ Index (PMI) registered a reading of 56.8 for the second consecutive month in April, remaining at its highest level since the end of 2017.

April saw a robust increase in business activity across Saudi Arabia’s non-oil private sector, with the rate of growth quickening for the fourth month in a row to the fastest since December 2017.

Firms that reported higher output in April often linked this to stronger underlying demand and an associated rise in new business, noted the survey, sponsored by Emirates NBD and produced by IHS Markit.

Growth of new work eased slightly from March’s near four-year high, but nonetheless remained sharp overall and stronger than that of output. New export orders meanwhile rose modestly in April compared with total new business.

However, the non-oil private sector jobs market remained lackluster at the start of the second quarter.

After falling slightly in March, the level of employment posted only a fractional increase in April, to continue the worst sequence of jobs data for five years.

Competitive pressures and attempts to control costs were among the factors helping to constrain staff recruitment, according to the survey.

“The headline PMI was unchanged at 56.8 last month. Output and new order growth remained firm, but there has been no meaningful growth in private sector employment over the last three months,” Khatija Haque, Head of MENA Research at Emirates NBD, noted in the report.  

“Firms are also discounting prices more aggressively in a sign of an increasingly competitive environment.  The decline in selling prices likely supported output and new order growth in April,” she added.