RIYADH: Saudi Arabia’s non-oil private sector continued its growth momentum in April, driven by strong demand conditions across domestic markets, as indicated by an economic tracker.
The Kingdom’s Purchasing Managers’ Index in April remained unchanged at 57 compared to March, signifying a flourishing non-oil economy in the country, according to the Riyad Bank Saudi Arabia PMI report by S&P Global.
In February, PMI hit a five-month high of 57.2, while it was 55.4 in January.
According to S&P Global, any PMI reading above 50 indicates growth in the non-oil sector, while readings below 50 signal contraction.
David Owen, senior economist at S&P Global Market Intelligence, said: “The latest Saudi PMI has sustained a robust figure of 57.0 for the second consecutive month, signifying a flourishing non-oil economy. This uptrend hints at an anticipated spike in the non-oil GDP, likely exceeding the 4.5 percent mark for this year.”
He added: “Noteworthy is the surge in new orders and inventory expansion, indicative of a proactive response to mounting demand within the market.”
According to the report, expectations of strong sales performance drove companies to increase their purchasing activities in April, while cost considerations caused a decline in job creation during the month.
S&P Global highlighted that the overall rate of input price inflation eased to a nine-month low in April.
“Despite a decline in employment figures, there’s a notable increase in the costs associated with employment to incentivize the workforce. This strategy aims to bolster productivity and ensure the retention of skilled workers within the expanding economy,” added Owen.
Competitive pricing, promotional activity, investment, and expanding client bases, particularly in the domestic market, were other crucial factors that propelled the non-oil private sector in the Kingdom in April, the report noted.
Regarding the future outlook, most of the companies in Saudi Arabia that took part in the survey expressed a positive view due to continued improvement in sales performances in April.
“The prevailing strength in demand, along with strategic marketing initiatives and corporate expansions in both wholesale and retail sectors, further fortifies the positive trajectory of the Saudi economy,” Owen said.
He concluded: “The sustained expansion, coupled with evolving market dynamics, underscores a favorable environment for continued economic prosperity and stability in Saudi Arabia’s non-oil economy.”
