Saudi non-oil private sector keeps growing as COVID-19 impact eases – PMI

Saudi Arabia’s non-oil private sector activity expanded for the third straight month in November as the economy recovers steadily from the impact of the COVID-19 pandemic, a survey showed on Thursday.

The seasonally adjusted IHS Markit Saudi Arabia Purchasing Managers’ Index (PMI) rose to 54.7 in November from 51.0 in October. The 50.0 mark separates growth from contraction.

Output growth accelerated driven by an increase in sales, while employment returned to growth for the first time since January, although only fractionally.

“A third successive rise in the Saudi Arabia PMI pointed to an economy getting back on its feet in November,” said David Owen, economist at IHS Markit.

“Employment started to rise, while business confidence strengthened in the wake of encouraging vaccine news and sharper demand growth. As a result, there was evidence of firms raising investment in anticipation of an uplift in 2021 should the pandemic come to an end,” he said.

The expansion of the private sector is at the core of Saudi authorities’ plans to diversify the economy of the world’s biggest oil exporter, hit hard this year by the twin shock of the new coronavirus outbreak and lower oil prices.

Despite the November PMI improvement, the headline index – as well as key sub-components – remained below their long-run average, “hinting at a continued gap between the economy’s current conditions and its pre-COVID momentum,” Owen said.

Main Photo: EPA-EFE/SEDAT SUNA