Saudi Arabia’s Non-Oil Business Activity Hits 2.5-Year Low – PMI

KSA, 4 July, 2024 : Saudi Arabia’s non-oil business activity fell to its lowest level since January 2022, with the Riyad Bank Purchasing Manager’s Index (PMI) dropping to 55.0 in June from May’s 56.4. Despite the decline, the PMI remained above the neutral 50.0 mark, indicating continued improvement in business conditions.

Business activity in the non-oil private sector saw strong growth in June as companies increased output to support sales and projects. However, new order growth slowed to its weakest in nearly 2.5 years. Input purchases rose at the slowest rate in almost three years, as businesses tempered stockpile increases. Job creation also softened due to wage pressures.

While some companies reported stronger demand, others noted a softening market. Export sales saw the fastest growth in 2024, aiding new order volumes. Inventory growth slowed but remained sharp.

Naif Al-Ghaith, Chief Economist at Riyad Bank, noted the PMI's drop to 55.0 in June, reflecting the slowest expansion since January 2022. A marginal rise in prices was reported, with higher costs offset by discounting efforts. Despite a suppressed rate of charge inflation, input prices rose at their fastest pace in four months.

Al-Ghaith highlighted a positive outlook for Q2, with non-oil GDP growth expected to exceed 3%. The non-oil sectors’ performance continues to support economic growth and diversification, driven by high output levels, stable supply chains, and moderate job creation.

Source : www.zawya.com