Riyadh - Sharikat Mubasher: Saudi Arabia’s non-oil private sector returned to growth in April, with the Purchasing Managers’ Index (PMI) above the 50.0 threshold, driven by an increase in companies’ output in response to an improvement in new business volumes and to progress existing work.
The seasonally adjusted PMI increased from 48.8 in March to 51.5 in April, signaling a modest recovery in operating conditions, according to the Riyad Bank Saudi Arabia PMI report.
Businesses highlighted a modest uplift in activity expectations for the year ahead; however, the overall rate of business expansion remained dampened by delays in client spending decisions.
New business received by non-oil companies improved in April after a decline in March. Survey respondents reported an increase in client numbers and stronger demand. However, the rate of sales growth remained relatively mild, as delays in client spending and investment decisions reportedly offset gains.
Naif Al-Ghaith, Chief Economist at Riyad Bank, said: “The improvement in the PMI reflects a recovery in business activity and new orders, both of which moved back into growth territory. Firms reported higher output levels, supported by an increase in domestic demand and continued progress on existing projects. This suggests that internal economic momentum, driven by government spending, infrastructure development, and private sector participation, continues to act as a key stabilizing force for the economy.”
The PMI is a weighted average of the following five indices: New Orders (30%), Output (25%), Employment (20%), Suppliers’ Delivery Times (15%), and Stocks of Purchases (10%).
