Saudi non-oil new business growth hits seven-year high in September – PMI
DUBAI, Oct. 5 (Reuters) – Saudi Arabia’s non-oil private sector grew in September, with new orders increasing at the fastest rate in seven years, a business survey showed, amid an easing of COVID-19 restrictions on activity and travel boosted customer demand.
Saudi Arabia’s seasonally adjusted IHS Markit Purchasing Managers Index (PMI) jumped to 58.6 in September from 54.1 in August, well above the 50 mark that separates growth from contraction.
The 4.5 point gain signals the biggest improvement in the non-oil economy since August 2015.
Companies increased production at the fastest pace since May and new orders received by non-oil companies jumped, with the respective sub-index rising nearly 10 points month-on-month.
“After two successive drops, the latest reading showed that the economic recovery has endurance, and the easing of pandemic measures will trigger new waves of demand,” said David Owen, economist at IHS Markit.
Saudi Arabia, the largest Arab economy and the world’s largest oil exporter, expects economic growth of 2.6% this year and 7.5% in 2022, after contracting 4.1 % last year caused by the coronavirus crisis and record oil prices.
Private sector growth is a central aspect of Crown Prince Mohammed bin Salman’s Vision 2030, a plan to transform the economy and make it less dependent on oil.
But despite the surge in new orders, the job creation rate remained weak in September, with companies surveyed reporting sufficient capacity levels.
“Demand pressures and growing business optimism should cause more businesses to hire staff in the last quarter of the year,” Owen said.
Reporting by Davide Barbuscia; Editing by Catherine Evans
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