Today sees the release of April data from the Emirates NBD Purchasing Managers’ Index™ (PMI®) for Saudi Arabia.
The survey, sponsored by Emirates NBD and produced by IHS Markit, contains original data collected from a monthly survey of business conditions in the Saudi Arabian private sector.
Commenting on the Saudi Arabia PMI® survey, Khatija Haque, Head of MENA Research at Emirates NBD, said:
“The headline PMI was unchanged at 56.8 last month. Output and new order growth remained firm, but there has been no meaningful growth in private sector employment over the last three months. Firms are also discounting prices more aggressively in a sign of an increasingly competitive environment. The decline in selling prices likely supported output and new order growth in April.”
The main findings of the April survey were as follows:
-Output growth accelerates to quickest since December 2017
-Employment remains broadly unchanged despite rising demand
-Business confidence towards future activity rebounds to three-month high
-Output prices fall at fastest rate for 14 months
The headline seasonally adjusted Emirates NBD Saudi Arabia Purchasing Managers’ Index™ (PMI®) – a composite gauge designed to give a single-figure snapshot of operating conditions in the non-oil private sector economy – registered a reading of 56.8 for the second consecutive month in April, remaining at its highest level since the end of 2017.
April saw a robust increase in business activity across Saudi Arabia’s non-oil private sector, with the rate of growth quickening for the fourth month in a row to the fastest since December 2017. Firms that reported higher output in April often linked this to stronger underlying demand and an associated rise in new business. Growth of new work eased slightly from March’s near four-year high, but nonetheless remained sharp overall and stronger than that of output. New export orders meanwhile rose modestly in April compared with total new business.
Higher output requirements among Saudi Arabia’s non-oil private sector firms in April were reflected in a further rise in purchasing activity during the month. The survey also found evidence of stock levels being bolstered in anticipation of higher inflows of new orders in the months ahead. Business confidence towards future output rebounded strongly from a six-month low in March to show one of the highest degrees of optimism over the past five years.
However, the non-oil private sector jobs market remained lacklustre at the start of the second quarter. After falling slightly in March, the level of employment posted only a fractional increase in April, to continue the worst sequence of jobs data for five years. Competitive pressures and attempts to control costs were among the factors helping to constrain staff recruitment, according to the survey.
Efforts to stimulate sales saw average prices charged for goods and services fall for a sixth straight month in April. Moreover, the rate of decline was among the quickest seen in almost ten years of data collection. A slight fall in firms’ input costs provided scope for price discounts.
Finally, lead times on purchased items decreased on average in April, though the improvement in supplier performance was slightly less marked than in March.