Saudi non-oil sector expansion in August was slowest in five months

Saudi non-oil sector expansion in August was slowest in five months

While Saudi Arabia’s non-oil economy expanded in August, output grew at the weakest pace in ten months and new orders rose to a lesser extent amid a softer recovery in export demand, the latest survey of purchasing managers showed on Sunday. The seasonally adjusted IHS Markit Saudi Arabia Purchasing Managers’ Index (PMI) fell to 54.1 in August from 55.8 in July; the slowest in five months. Businesses continued to report high levels of excess capacity and a subdued outlook for future output. “As a result, employment growth remained negligible while stocks of purchases increased at the slowest pace since last October. Output charges meanwhile rose at the strongest rate for a year despite only a modest uptick in input costs,” the report said. A large part of the 1.7-point fall in the PMI was driven by the Output Index, which dropped sharply to its lowest level since October 2020. Despite that there was a rise in non-oil activity, which the survey panellists attributed to demand improvements and the easing of travel measures. "The non-oil economy went slightly off the boil in August, as output growth slipped to the weakest level for ten months amid a slowdown in new business gains.