S&P: The non-oil private sector in Saudi continues to grow strongly
A survey by Standard & Poor’s (S&P) showed on Monday that Saudi Arabia’s non-oil private sector continued to post solid growth in April, albeit at a slower pace than in March, after inflation concerns began to take hold and impacted demand.
Seasonally adjusted Saudi Arabia’s Standard & Poor’s Purchasing Managers’ Index fell to 55.7 in April from 56.8 in March, its lowest reading in three months.
The S&P Saudi Arabia BMI Index is a comprehensive benchmark that identifies and measures the investable world of publicly traded companies headquartered in Saudi and uses relevant flotation factors for global investors.
David Owen, an economist at Standard & Poor’s, wrote that the Saudi PMI “suggested another strong improvement in the strength of the non-oil sector in April, but it also showed the first signs of price pressures affecting customers’ spending decisions.”
The growth rate of new orders was the lowest since January, with some panelists surveyed citing a decline in sales due to recent fee increases.
The sub-production index remains strong, with a pace of 59.7 in April although down from 62.4 in March and below the series average of 61.3.
“Indeed, the notable rise in production prices during April, in light of higher commodity prices and global inflation concerns, risked a further decline in sales in the coming months. Business confidence in future activity levels has fallen to an all-time low,” Owen said.
It is one of the lowest levels ever recorded in three months, indicating a marked degree of uncertainty over whether the current rate of production growth can be maintained.”
Some participants in the survey said that more workers were employed to enhance capacities, and employment rose in the four sectors covered by the survey.