Riyadh - Sharikat Mubasher: Saudi Arabia’s non-oil private sector economy witnessed a sharp decline in March in new business as the Purchasing Managers’ Index (PMI) dropped to 48.8 from 56.1 in February, signaling a deterioration in business conditions for the first time in over five-and-a-half years.

The Riyad Bank Saudi Arabia PMI report stated that the 7.3-point fall in the index since the previous month was the second-largest since the survey began in 2009, behind that seen in March 2020.

Responses from non-oil firms highlighted a steep fall in new export orders and weaker domestic customer confidence, which decreased sales and led businesses to reduce their output. Supply chains were also disrupted, with companies reporting freight delays and rising transport costs, contributing to a notable increase in backlogs of work.

Naif Al-Ghaith, Chief Economist at Riyad Bank, said: “The Saudi Arabia PMI moderated to 48.8 in March from 56.1 in February, reflecting a temporary adjustment following a strong expansion phase. While this marks the first dip below the expansion threshold in over five-and-a-half years.”

The PMI is a weighted average of the following five indices: New Orders (30%), Output (25%), Employment (20%), Suppliers’ Delivery Times (15%), and Stocks of Purchases (10%).