Saudi non-oil private sector growth slows in July but stays solid – PMI

Folks sit at David Burke’s restaurant, in The Zone restaurant complicated, in Riyadh, Saudi Arabia August 25, 2021. Image taken August 25, 2021. REUTERS/Ahmed Yosri

DUBAI, Aug 3 (Reuters) – Saudi Arabia’s non-oil personal sector saved up a gradual tempo of development in July, albeit slowing barely from June, helped by will increase in buyer numbers, buying and output, a enterprise survey confirmed on Wednesday.

The headline seasonally adjusted S&P World Saudi Arabia Buying Managers’ Index (PMI) for the entire financial system fell to 56.3 in July from 57.0 in June. It dipped under the sequence common of 56.8 however remained nicely above the impartial 50.0 mark that separates development from contraction.

The output subindex, a measure of enterprise exercise, fell to 59.9 in July from 61.8 in June, additionally falling under the sequence common since 2009 of 61.4.

“New enterprise continued to rise considerably, helped by recovering demand and strengthening export gross sales. Because of this, output expanded sharply and employment numbers rose on the quickest tempo since September 2019, following a interval of weak point in labour markets because the COVID-19 pandemic started,” wrote David Owen, economist at survey compiler S&P World Market Intelligence.

The employment subindex rose to 51.3 from 50.7, its quickest fee of enlargement since September 2019, although under the sequence common of 51.8.

“Corporations continued to face stress from sharply rising enter prices, nonetheless, with the speed of inflation staying robust regardless of easing from June. Output costs rose solidly which may affect market demand going ahead as international inflationary pressures additionally persist,” Owen mentioned.

Expectations for output over the following 12 months amongst firms surveyed “remained firmly assured of an enlargement in enterprise exercise,” the PMI report mentioned, regardless of being fractionally decrease than in June.

“Roughly 21% of survey panellists predicted an increase in output, typically linked to bettering market circumstances and better buyer demand. This in contrast with simply 1% of companies that forecast a decline,” the report mentioned.

Reporting by Yousef Saba; Modifying by Hugh Lawson

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