According to official figures, Saudi Arabia’s private sector non-oil growth continued to expand in May. The Kingdom’s Purchasing Managers’ Index came in at 56.4 in May, down slightly from 57 in April.
S&P Global’s Riyad Bank Saudi Arabia PMI report states that Saudi Arabia’s business activity increased significantly in May, extending a run of strong output growth in the country’s non-oil sector.
The PMI was 55.4 in January, 57.2 in February, and 57 in March.
According to S&P Global, values below 50 indicate contraction in the non-oil sector, while numbers above 50 suggest expansion.
“The PMI for Saudi Arabia’s non-oil economy shows a positive trend, driven by increasing demand as evidenced by the rise in new orders,” stated Naif Al-Ghaith, chief economist at Riyad Bank. In order to meet the rising demand for products and services, this growth has made an increase in employment necessary.
“Yet, even though the increase in output prices has been seen at a slower pace, the surge in demand has also led to price pressures impacting input prices and staff costs,” he continued. This delicate balancing act illustrates the difficulties companies confront in controlling expenses while attempting to take advantage of the growing market.
The research emphasized that despite additional reports of robust demand conditions, particularly in domestic markets, company activity and new order growth in the Kingdom remained steep in May.
After hitting a record high in April, robust inventory expansion persisted in May as businesses were ready for potential periods of high sales.
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