Saudi PMI rises to three-month high in July

Growth in Saudi Arabia’s non-oil private sector picked up in July on the back of sharper increases in output and new orders, a survey report by Emirates NBD showed.

The seasonally adjusted Emirates NBD Saudi Arabia Purchasing Managers’ Index (PMI) rose to 55.7 in July – a three-month high – from 54.3 in June. A level above 50 indicates expansion.

“Firms were more optimistic last month, and this likely contributed to increased buying activity and inventory accumulation,” Khatija Haque, head of MENA Research at Emirates NBD, said in a statement.

Output and new orders increased at a faster rate in July compared to the previous month, with firms citing stronger demand and higher construction activity as supporting factors. 

Higher output requirements encouraged companies to purchase more inputs, stimulating job creation. Purchasing activity improved and pre-production inventories also rose at a faster rate last month, the report said.

The input price index rose to 53.4 – a three month high. “The increase was largely due to higher costs of raw materials and other inputs, as staff costs rose more modestly,” Haque said.

Output, or selling, prices were only slightly higher on average in July with the sub-index at 50.7. The respondents cited “intense competitive conditions” as a reason for not passing on the costs to customers, the report said.

“Businesses surveyed were more optimistic about the outlook for the coming twelve months than they were in June, with the future output index rising to 59.6 last month,” it added.