Saudi non-oil growth accelerates to fastest pace in three months
Non-oil private sector business activity in Saudi Arabia expanded at the fastest pace in three months in September. The country’s PMI rose to 57.3 in last month from 57 in August, signalling a sustained improvement in growth momentum.
The non-oil private sector jobs market improved markedly in September and the rate of job creation was the fastest in 18 months, with some of the panellists raising their headcounts to improve product quality.
“At current levels, the PMI survey is consistent with yearon-year gross domestic product growth of around 3 per cent as we head into the final quarter of 2019,” said Amritpal Virdee, an economist at IHS Markit, said.
Output across the non-oil private sector rose sharply and the most since December 2017, buoyed by stronger underlying demand conditions according to the businesses surveyed for the study. Just under 38 per cent the of respondents forecast greater business activity over the next 12 months.
“Domestic demand, underpinned by government spending ... is driving growth in the kingdom’s non-oil sectors,” Khatija Haque, head of Mena research at Emirates NBD, said in a note on Thursday.
Meanwhile, business activity in the non-oil private sector of the UAE, continued to accelerate in September, albeit at a slower pace for the fourth month running, as growth of new orders softened.
The headline seasonally adjusted IHS Markit UAE Purchasing Managers’ Index – an indicator that provides an overview of operating conditions in the non-oil private sector economy – fell to 51.1 in September from 51.6 in August.
The figure signalled the weakest improvement in the health of the private sector since May 2010, affected by a slowdown in demand growth amid a weakening global economy and escalating trade wars.
The slowdown was evident in foreign sales, which grew at the weakest pace since February. The overall expansion of the UAE non-oil economic activity was the second-softest in over six years. However, even the marginal rise in demand, and greater marketing push, helped companies report a solid increase in overall nonoil economic output, according to the survey.
“After comparatively strong demand growth earlier this year, September data signalled the weakest monthly upturn in new orders …. companies reportrf further competitive pressures, while also seeing a slowdown in customer movement despite sustained price discounting,” said David Owen, an economist at IHS Markit.