According to the Emirates NBD Purchasing Managers’ Index (PMI), Saudi Arabia’s non-oil private sector grew at its slowest rate in nine years last year.
The headline PMI, which collects data from a monthly poll of business conditions in the private sector, averaged 53.8 during last year compared to an annual average of 58.0 over the previous eight years.
In December, the PMI fell to 54.5 from a year-high of 55.2 in November, with the rate of job creation slipping to a 20-month low.
Despite easing since November, output growth in December remained quicker than the average over 2018 as a whole. The survey indicated that business activity had risen in part due to stronger demand, with companies noting a further – albeit slightly slower – increase in inflows of new business.
New export orders were up for a third straight month but only fractionally, indicating that the pick-up in demand was centred on the domestic market.
While underlying market conditions were reported to have improved, the survey continued to point to strong competitive pressures across the private sector and, on average, firms reduced selling prices in order to help support sales.
Elsewhere, latest data showed the continuation of a weak rate of employment growth across the non-oil private sector. December’s increase in staffing numbers was, in fact, the smallest since April 2017, with the vast majority of companies keeping headcounts unchanged from the month before.
Looking ahead, business confidence towards growth prospects over the next 12 months improved to the highest in five years. Firms reported hopes of sustained improvement in market conditions, and foresee new products, competitive pricing and greater market activity leading to output growth.
Source Credit: Arabian Business