Saudi June non-oil business growth at record low

Growth in Saudi Arabia’s non-oil private sector slowed in June, a survey of businesses showed on Sunday, reaching its lowest level since the survey was launched in August 2009.

The seasonally adjusted Emirates NBD Saudi Arabia Purchasing Managers’ Index dropped to 56.1 points last month from 57 in May. The index remained well above the 50-point mark which separates growth from contraction.

“While the PMI data suggest that growth in the non-oil sector has slowed markedly in the second quarter of 2015, it is important to note that these sectors are still growing at a robust rate,” said Khatija Haque, head of regional research at Emirates NBD.

The slowdown appeared partly due to the onset of the Muslim fasting month of Ramadan, which began on June 18 this year, as well as to the fading of a one-off fiscal stimulus in the first quarter, when the government gave a two months of salary bonus to state employees to mark the accession of King Salman.

Output growth fell to a five-month low of 62.1 points in June from 63.4 in May, while growth in new orders slipped much faster to a record low of 59.8 points from 62.7 a month before.

Output price inflation edged down marginally to 50.6 points, while input price inflation fell much more steeply to 52 points.