Riyadh – Mubasher: Saudi Arabia’s non-oil private sector growth eased slightly in July, according to a recent survey sponsored by Emirates NBD and produced by IHS Markit.
The seasonally adjusted Emirates NBD Saudi Arabia Purchasing Managers' Index (PMI) slowed to 54.9 in July from 55.0 in the month before, with a reading above 50 indicates expansion, while the headline PMI averaged 53.4 year-to-date, below the 56.0 average for the prior-year period.
The survey also showed that employment and export orders in the kingdom’s non-oil private sector rose slightly in July. Meanwhile, output and new orders jumped sharply last month, but at a slower pace than in June.
“There is very little evidence of wage growth in Saudi Arabia’s private sector, with the staff costs index at 50.3 in July, similar to the prior two months,” according to the survey. Work backlogs levelled up in the previous month due to a delay in current projects implemented by some companies.
“Firms saw inventories rise at the fastest rate this year in July, which may indicate some optimism about improving demand in the near term. More than 18% of respondents expected their output to be higher in 12 months’ time, down from more than 40% earlier in the year. Given the sharp rise in actual output and new orders in June and July, it is reasonable for expectations to be more modest going forward,” head of MENA Research at Emirates NBD Khatija Haque said.
Input costs for non-oil private sector firms continued to hike in July, but at a softer pace than in the previous month. Companies kept selling prices unchanged, “although the output price index was fractionally below the neutral 50.0 level,” the survey highlighted.
“Non-oil private sector firms in Saudi Arabia continued to report marked growth of output in the latest survey period, although the rate of expansion cooled fractionally since June. Survey respondents linked higher activity to solid inflows of new business,” it added.