Saudi non-oil activity eases in November but outlook improves -PMI
Reuters
Published Dec 04, 2023 11:29PM ET
DUBAI (Reuters) - Growth in non-oil business activity in Saudi Arabia eased in November from the previous month as a decline in export demand and inflationary pressures weighed, but the outlook was positive as new orders hit a five-month high, a survey showed on Tuesday.
The seasonally adjusted Riyad Bank Saudi Arabia Purchasing Managers' Index slowed to 57.5 in November, from 58.4 in October, but remained well above the 50 mark signalling growth.
Higher sales volumes drove output higher, with the output sub index rising to 61.2 in November from 60.1 in October.
The sub index for new orders surged to 66.3 in November, the fastest since June, on improved market conditions and increased investments, but remained largely driven by domestic demand as new export orders contracted by the sharpest pace since March 2021.
Naif Al-Ghaith, chief economist at Riyad Bank, said the decline in growth in foreign orders was attributable to the petrochemical sector which represents about 30% of non-oil exports.
Latest government trade data showed that non-oil exports, including re-exports, dropped by 17.2% in September year-on-year and 20.7% month-on-month.
"In summary, the Saudi PMI has shown positive signs of expansion, driven by strong sales, increased orders and effective marketing strategies," Al-Ghaith said.
"However, the export numbers, particularly in the petrochemical sectors, have remained relatively low compared to the previous year."
While the November pace of growth in employment eased from a nine-year high in October - though firmly in expansion mode - input costs rose at the fastest pace since June 2022, the survey showed.
Still, survey respondents remained confident about future outlook on expectations of higher new business inflows supporting overall output levels.
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Written By: Reuters
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