Arab News, Mon, May 06, 2024 | Shawwal 27, 1445
Saudi Arabia’s non-oil sector maintains growth with steady PMI of 57 in April
Saudi Arabia:
Saudi Arabia’s non-oil private sector continued its growth momentum in April,
driven by strong demand conditions across domestic markets, as indicated by an
economic tracker.
The Kingdom’s Purchasing Managers’ Index in April
remained unchanged at 57 compared to March, signifying a flourishing non-oil
economy in the country, according to the Riyad Bank Saudi Arabia PMI report by
S&P Global.
In February, PMI hit a five-month high of 57.2,
while it was 55.4 in January.
According to S&P Global, any PMI reading above 50
indicates growth in the non-oil sector, while readings below 50 signal
contraction.
David Owen, senior economist at S&P Global Market
Intelligence, said: “The latest Saudi PMI has sustained a robust figure of 57.0
for the second consecutive month, signifying a flourishing non-oil economy. This
uptrend hints at an anticipated spike in the non-oil GDP, likely exceeding the
4.5 percent mark for this year.”
He added: “Noteworthy is the surge in new orders
and inventory expansion, indicative of a proactive response to mounting demand
within the market.”
According to the report, expectations of strong
sales performance drove companies to increase their purchasing activities in
April, while cost considerations caused a decline in job creation during the
month.
S&P Global highlighted that the overall rate of
input price inflation eased to a nine-month low in April.
“Despite a decline in employment figures, there’s
a notable increase in the costs associated with employment to incentivize the
workforce. This strategy aims to bolster productivity and ensure the retention
of skilled workers within the expanding economy,” added Owen.
Competitive pricing, promotional activity,
investment, and expanding client bases, particularly in the domestic market,
were other crucial factors that propelled the non-oil private sector in the
Kingdom in April, the report noted.
Regarding the future outlook, most of the
companies in Saudi Arabia that took part in the survey expressed a positive view
due to continued improvement in sales performances in April.
“The prevailing strength in demand, along with
strategic marketing initiatives and corporate expansions in both wholesale and
retail sectors, further fortifies the positive trajectory of the Saudi economy,”
Owen said.
He concluded: “The sustained expansion, coupled
with evolving market dynamics, underscores a favorable environment for continued
economic prosperity and stability in Saudi Arabia’s non-oil economy.”