In April, Saudi Arabia’s non-oil business sector continued to show resilience, maintaining a consistent pace of growth. This performance was largely supported by robust domestic demand, even as the rate of new order expansion experienced a slight decrease.
The seasonally-adjusted Riyad Bank Saudi Arabia Purchasing Managers’ Index (PMI) remained stable at 57.0 for the month, mirroring the figure from March and staying comfortably above the 50.0 threshold that signifies growth in the industry.
The Output subindex, which represents production levels, saw a minor dip to 61.9 in April from March’s six-month peak of 62.2. Despite this, the subindex still indicated strong demand conditions, with the Wholesale & Retail sector recording the most significant rise in production output.
This uptrend hints at an anticipated spike in the non-oil GDP, likely exceeding the 4.5% mark for this year,
said Naif Al Ghaith, Riyad Bank’s chief economist, regarding the overall PMI.
Al Ghaith also noted the significant increase in new orders and inventory levels, reflecting the market’s proactive approach to the escalating demand.
While new order growth did slow in April, with its index reading falling to 61.0 from 64.0 in March, sales continued to benefit from the strong domestic business climate. Additionally, export orders persisted in their expansionary trend, spurred on by the manufacturing sector’s performance.
Despite a year-on-year contraction of 1.8% in Saudi Arabia’s economy during the first quarter, attributable to ongoing declines in oil activities, the non-oil GDP showed a 2.8% annual increase, according to preliminary government data. However, quarter-on-quarter figures indicated a slight slowdown, with non-oil GDP growing only by 0.5% and government activities seeing a 1% decline.
Nevertheless, the business sentiment for the upcoming 12 months remained optimistic in April, with positive expectations widespread across various sectors, as indicated by the survey.