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- Kingdom surpasses its G20 peers with Purchasing Managers’ Index hitting 57.5, economy tracker showed
RIYADH: Saudi Arabia’s non-oil sector witnessed the fastest sales growth since July 2023, as the Kingdom’s Purchasing Managers’ Index hit 57.5 in December, an economy tracker showed.
The Riyad Bank Saudi Arabia PMI report, compiled by S&P Global, revealed that while the economic indicator remained unchanged from November, it slightly dipped from October’s 58.4.
S&P Global noted the November index continued to significantly exceed the neutral threshold of 50, indicating a substantial improvement in the non-oil private sector.
Saudi Arabia also topped its G20 peers in December’s PMI.
India’s PMI dipped to an 18-month low of 54.9 in December, followed by the US at 47.9, Australia at 47.6 and Germany at 43.3.
“Saudi Arabia’s non-oil PMI for December reached an impressive 57.5 driven by a faster increase in new orders, particularly within the manufacturing sector,” Naif Al-Ghaith, chief economist at Riyad Bank, commented in the report.
He added: “This growth was supported by a sharp rise in business activity and exports, highlighting the resilience and strength of the non-oil economy.”
HIGHLIGHTS
Increased demand momentum during the month gave firms greater confidence in pricing and supported a further marked surge in purchasing activity.
The positive employment outlook in Saudi Arabia during December reflected the success of the government’s efforts to create a diverse and robust economy.
Non-oil firms stepped up purchases as activity levels rose in the final month of 2023, benefiting from a reduction in average supplier delivery times.
S&P Global went on to note that increased demand momentum during the month gave firms greater confidence in pricing and supported a further marked surge in purchasing activity.
Al-Ghaith pointed out that the growth in demand and expansion of the non-oil sector have also had a positive impact on employment.
“With the growing need for skilled workers to meet rising demand, employment has witnessed a noticeable increase. To attract and retain talent, wages have also seen an upward trend,” he commented.
The S&P Global economist added that the positive employment outlook in Saudi Arabia during December reflected the success of the government’s efforts to create a diverse and robust economy, offering job opportunities and improving the standard of living for its citizens.
Non-oil firms stepped up purchases as activity levels rose in the final month of 2023, benefiting from a reduction in average supplier delivery times, which was one of the sharpest recorded since the PMI survey began 14 years ago.
“The positive performance of the non-oil sector throughout 2023 has exceeded the expansion witnessed in the previous year, further demonstrating the effectiveness of policies aimed at reducing dependence on oil revenues. The positive expansion in PMI in December is a promising sign for the country’s economic diversification efforts,” said Al-Ghaith.
According to the report, non-oil sector companies were upbeat about expectations for the next 12 months. However, the degree of confidence softened and was below the trend recorded in 2023.