Saudi non-oil private sector growth slowed slightly in March – PMI

Saudi Arabia’s non-oil private sector grew for the seventh straight month in March, albeit at a slower pace, according to the latest PMI survey data.

The seasonally adjusted IHS Markit Saudi Arabia Purchasing Managers’ Index (PMI) fell from 53.9 in February to 53.3 in March. A PMI above 50 represents an expansion when compared with the previous month.

New orders fell to the lowest reading since last October, indicating a further slowdown in sales growth. Survey respondents noted that several clients had reduced spending during the month due to the ongoing impact of the Covid-19 pandemic. Strong competition and a renewed drop in exports were also cited as weighing on growth.

Employment numbers were largely stable in March, indicating one of the best job market performances since before the Covid-19 outbreak.

Read: Saudi economy contracted 3.9% in fourth quarter as oil drags

Firms experienced delayed input shipments as global supply chains continued to struggle under Covid-19 restrictions. This fed through to a quicker increase in input prices, with inflation accelerating to a four-month high, the report said.

“The pandemic and associated restrictions continued to trim new business growth, according to respondents, contributing to a more downbeat outlook for business activity over the next 12 months,” said David Owen, Economist at IHS Markit.

“This largely reflected doubts about clients’ willingness to spend as well as the short-term boost to the economy from the vaccine rollout, with some firms expecting market activity to remain subdued until the second half of the year.”