Saudi non-oil private sector grows solidly in May, steady from April – PMI

DUBAI (Reuters) – Saudi Arabia’s non-oil personal sector continued robust development in Might, notching its twenty first consecutive month of growth, as demand withstood rising output prices, a survey confirmed on Sunday.

The headline seasonally adjusted S&P International Saudi Arabia Buying Managers’ Index (PMI) for the entire economic system was regular at 55.7 in Might, the identical as in April, which was its lowest studying since January and under the collection common of 56.8.

The output sub-index, which measures enterprise exercise, fell barely to 59.3 in Might from 59.7 in April, which was additionally the slowest tempo of development since January. It was under the collection common since 2009 of 61.4.

“The continued energy of the home non-oil economic system inspired companies to pass-through increased enter prices to their prospects in Might, with the newest PMI knowledge indicating one other strong improve in promoting costs because of better gas, materials and transport prices,” wrote David Owen, economist at survey compiler at S&P International Market Intelligence.

“Buyer demand seems to be responding nicely to cost mark-ups to this point, with one other marked improve in new orders recorded in Might, resulting in a strong growth in enterprise exercise,” Owen stated.

“Nevertheless, this may increasingly begin to change as international inflation builds and family prices rise, notably as international provide chains stay below appreciable strain from lockdowns in China and the Russia-Ukraine struggle.”

The output costs sub-index confirmed the tempo of worth will increase slowed from April however remained strong, falling to 52.7 in Might from 53.4.

Employment development dipped marginally however remained in development territory, the place it has been every month since April 2021, excluding March this yr.

As provide chains stay strained, together with because of lockdowns in China and the Russia-Ukraine struggle, “the outlook for future exercise remained notably weak, with simply 11% of respondents signalling expectations of an increase in output by Might 2023, lower than half the survey’s long-run development,” Owen stated.

(Reporting by Yousef Saba; Enhancing by Toby Chopra)