The business outlook for Saudi Arabia’s non-oil private sector remains positive, despite showing the weakest improvement for five months, according to the IHS Markit Saudi Arabia Purchasing Managers’ Index (PMI).
Blaming increased competition for new work and a failure to convert interest into sales, the index slipped to 56.9 in December, from 58.3 in November, its lowest recording for the kingdom since July 2019.
Total new business volumes increased “sharply” in December, although at a more moderate rate than the four-and-a-half year peak witnessed in November.
The latest survey indicated one of the strongest rises in stocks of purchases seen over the past two years, while the rate of inflation was the slowest for four months, which reflected a slower rise in average staff salaries.
Tim Moore, economics associate director at HIS Markit, said: “The latest Saudi Arabia PMI points to a shirt-term setback for the non-oil private sector, with growth of business activity and new work slipping since November.
“However, the survey continues to indicate a much stronger improvement in business conditions than at the same time during 2018, particularly in relation to new order books.”
Employment numbers also increased for the ninth consecutive month across the non-oil private sector.
According to the survey, non-oil private sector companies remain optimistic about their growth prospects for the next 12 months.
“Latest data also suggests that non-oil firms in Saudi Arabia are confident about the outlook for 2020, with business optimism holding at a much higher level than seen in the middle of last year,” added Moore.
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