Riyadh - Sharikat Mubasher: The growth of Saudi Arabia’s non-oil private sector accelerated to a six-month high in August, driven by a solid improvement in business conditions.
According to the latest Riyad Bank Saudi Arabia PMI report, the Saudi Purchasing Managers’ Index (PMI) registered 53.8 in August, up from 53.1 in July, indicating expansion in the sector for the fifth consecutive month underpinned by improving sales volumes and recovering market conditions.
The report stated that new orders expanded for the fifth consecutive month as well, following March's brief downturn, though some companies reported sales headwinds from intense competition and excess supply.
Employment trends in the non-oil private sector showed continued improvement, as workforce numbers expanded for the second month running. Supply chain conditions also continued to improve in August, supported by greater efforts to source items locally and increased vendor responsiveness.
Naif Al-Ghaith, Chief Economist at Riyad Bank, stated that the improvement in Saudi Arabia’s PMI reflects a continued recovery in market activity, with output expanding at its strongest pace in seven months and moving closer to its long-run average.
“Looking ahead, the improvement in business expectations provides a constructive signal for the remainder of the year. Continued fiscal support and the pipeline of development projects remain important anchors for private sector activity, while stronger confidence is translated into investment and hiring,” he said.
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%).
