RIYADH: The improvement in the health of the Saudi Arabian non-oil private sector economy was sustained in June, but growth lost momentum, according to a new business survey. Data from the Emirates NBD Saudi Arabia Purchasing Managers’ Index (PMI) showed both new orders and output increased at the weakest rates in eight months, while growth of buying levels softened to the weakest since data collection began.
Concurrently, there was a renewed increase in new export orders. On the price front, cost inflation was slightly above May’s survey-record low. Subsequently, average selling prices rose. The headline seasonally adjusted Emirates NBD Saudi Arabia PMI fell from 55.3 in May to an eight-month low of 54.3 in June. This was consistent with a marked, but slower, improvement in business conditions.
Moreover, the average performance of Q2 2017 (55.4) was weaker than in the opening quarter (56.7). Khatija Haque, head of MENA Research at Emirates NBD, said: “The average PMI for H1 2017 stood at 56.0, well above the neutral 50.0 level and signalling a faster rate of non-oil private sector growth than in H1 2016. “However, faster non-oil GDP growth this year will likely be offset by contraction in the oil sector this year, following OPEC’s decision to extend output cuts through Q1 2018.”