Riyadh - Sharikat Mubasher: The seasonally adjusted Riyad Bank Saudi Arabia Purchasing Managers' Index (PMI) declined to 55.4 points in January, registering its lowest level in two years despite the strong increase in business activity and new orders.
The report clarified that the PMI signaled a “solid but weaker” improvement in the health of the non-oil private sector economy.
Business activity levels expanded at their slowest pace since the start of 2022, although the upturn remained strong overall and widespread across the monitored sectors.
The report also noted that several businesses reported a slowing of demand momentum amid competitive pressures, while new export work dropped for the fourth time in six months.
The increase in new business was backed by a rise in input demand as purchasing activity and inventory holdings grew sharply.
Naif Al-Ghaith PhD, Chief Economist at Riyad Bank, commented: “Despite cost increases, output prices have remained low, signaling a high level of competitiveness in the market. This suggests that businesses are absorbing some of the cost pressure rather than passing it on to consumers, which could indicate a strategy to maintain market share in a competitive environment.”
The Riyad Bank Saudi Arabia PMI is compiled by S&P Global from surveys sent to purchasing managers in a panel of around 400 private sector companies.
Meanwhile, the PMI is a weighted average of five indices: new orders (30%), output (25%), employment (20%), suppliers’ delivery times (15%) and stocks of purchases (10%).
