Saudi non-oil economy grows in August on new orders and exports
Confidence among businesses for the year ahead hit a three-month high as demand outlook proves bullish
Saudi Arabia's non-oil economy recorded stronger growth in August as both new orders and exports grew.
IHS Markit's seasonally-adjusted Saudi Arabia Purchasing Managers' Index rose to 57.0 in August, up from 56.6 in July. The increase brought the country closer to the survey's 10-year average of 57.6. A reading above 50 indicates economic expansion.
"August PMI data for Saudi Arabia revealed a stronger improvement in economic conditions and when combined with the relatively solid expansion seen in July, should help support a faster quarter-on-quarter expansion for the third quarter of 2019," said Amritpal Virdee, an economist at IHS Markit.
"A bright spot was a quickening of both output and overall new order growth, which outweighed weaker job creation and helped improve overall business conditions," Mr Virdee added.
Growth was driven by higher numbers of domestic orders, which also led companies to increase purchasing, although input costs for companies continued to fall and hiring remained weak, with employment levels rising only marginally, and at the slowest pace since April. Operating expenses fell for the fourth time in eight months, driven by decreases both in average staff pay and purchasing costs.
Confidence for the year ahead hit a three-month high, as companies made "positive forecasts for underlying demand," Mr Virdee said.
Updated: September 3, 2019 09:34 AM