Riyadh – Mubasher: The headline Purchasing Managers' Index (PMI) dropped to 55.3 during May from 56.5 in April, falling to a six-month low, but showing a robust improvement in the health of the non-oil sector.
The Saudi non-oil sector’s expansion remained stable during May, supported by sharp growth in output and new orders, according to the Saudi Arabia PMI survey, sponsored by Emirates NBD and produced by IHS Markit.
On the price front, cost inflation dropped, selling prices were lowered, and new export orders declined for the second month in a row, reflecting the strong competition in external markets.
“The decline in Saudi Arabia’s PMI in May was largely due to slower new orders growth, with export orders in particular showing weakness. While the non-oil sector has seen stronger growth so far this year compared to 2016, the downside risks to overall GDP growth have increased with the extension of Organization of Petroleum Exporting Countries’ (OPEC) production cuts for a further nine months,” head of MENA Research at Emirates NBD Khatija Haque commented.
New orders continued to expand sharply, despite easing to the weakest level in seven months, while growth in total new work was led by the domestic market as new export orders fell for the second consecutive month, the survey stated.
As a result of higher output requirements, companies further bought input, easing to a 13-month low with a sharp growth rate. Hence, purchase prices increased.
The degree of positive sentiment reached its highest level in over a year across the Saudi non-oil sector.
