Time: May 03, 2018
RIYADH: Saudi Arabia’s Purchasing Managers’ Index (PMI) edged lower last month as new orders contracted.
Saudi PMI fell to 51.4 in April from 52.8 in March, which represents the lowest reading since the series began in August 2009.
The PMI report from the UAE’s largest bank, Emirates NBD (ENBD), showed that the Kingdom’s new orders weakened in April.
According to ENBD, firms blamed “subdued market demand, competitive pressures and unpredictable economic conditions” for the decline.
Still, employment increased ‘modestly’ in April, despite the weakness in new orders.
Despite the overall weakness of April’s survey, future expectations remained high, with around 43 percent of firms expecting their output to be higher in a year’s time.
“The average PMI for Saudi Arabia year-to-date is 52.6. This is well below the average for 2017 of 56.1, and also much lower than the long-run series average of 57.9,” said Khatija Haque, head of MENA research at Emirates NBD.
“That non-oil private sector activity has slowed so sharply this year is surprising to us, particularly when we consider the expansionary budget that was announced for 2018 to support growth in the non-oil sectors and the unexpectedly high oil price year-to-date, which usually drives stronger non-oil sector activity,” Haque added.
ENBD said the “softer than expected” PMI data year-to-date raises the downside risks to its 2.5 percent Saudi GDP growth forecast for 2018.