Saudi non-oil private sector growth dips amid Omicron worries; PMI

Saudi non-oil private sector growth dips amid Omicron worries; PMI

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Saudi Arabia’s non-oil private sector economy grew at a slow pace in December 2021, as concerns about the rapid spread of the COVID-19 Omicron variant hit customer demand and business confidence, according to the latest business survey.

The seasonally adjusted IHS Markit Saudi Arabia Purchasing Managers’ Index (PMI) fell three points from 56.9 in November to 53.9 in December, marking solid growth but falling well below 2021’s average of 55.8 and the series average of 56.8. The reading was the lowest since March, but still indicated a solid improvement in operating conditions across the non-oil private sector economy. 

Growth in output slowed, with the subindex at 57.3 in December compared with 61.7 in November. Growth in new orders weakened for a third straight month to hit its slowest pace since March, while the expansion in new export orders slowed to an eight-month low.

“The latest data pointed to particularly sharp slowdowns in new order growth across manufacturing and services, as panelists often commented on canceled bookings and weaker client demand,” said Mr. David Owen, an economist at survey compiler IHS Markit.

The slowdown in demand growth also meant that more firms had time to complete orders, leading to a faster decrease in