June 13, 2024

All time 15-month high surge in Saudi Arabia Private Sector Landscape

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Emirates NBD Purchasing Manager’s Index (PMI), growth of Saudi Arabia’s Non-oil private sector had surged to one of its highest point the previous month since December 2017.

It also indicated positive response in the business of Saudi Arabian private sector wherein despite market slowness and employment also was lowered amidst lack of all capacity measures, new order growth accelerated to the fastest since 2015.

The head of MENA Research at Emirates NBD, Khatija Haque stated that “The Average Purchasing Manager’s Index (PMI) reading for first quarter Q1 was 56.5, which clearly indicated strongest quarterly expansion in the non-oil private sector since Q4 2017.

However, this acceleration was affected by deceleration statistics as being shown in Job market and private sector employment declining for the third time only last month. As well, the purchasing power coupled with lower pricing power and decline in selling prices marginally for five months in tandem is also of great concern that needs to be immediately addressed.

With the stronger increases in new orders and output across the non-oil private sector, the PMI marginally climbed to 56.8% in March comparatively from 56.6% in February. It thus, indicated one of the strongest growth performances over the past three-and-a-half years.

Although New export orders got raised very marginally that is an indication that the momentum was wholly shifted due to a certain push through the domestic resources.

The report also suggested that the surge has been reflected on the resurgent cohesive market vibe and present conditions coupled with better sales efforts (Output), thus, improving product offerings and competitive pricing also helping to attract customers.

Since the trends in March, output of goods and services across non-oil private sector surged ahead to a seven-month high and with the higher business activity the companies have raised the bar in their buying levels and boost stocks of purchases.

Despite all the efforts, mild pressure remained on business front. The new hiring took a dip as there was decline in procurement process as the employment opportunities in the non-oil private sector took a dig slightly to end a near five-year sequence of workforce growth.

The survey also showed that confidence towards future output remained strongly positive, despite the degree of optimism easing further from January’s recent peak.

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