In April, the non-oil business sector in Saudi Arabia displayed a consistent pace of growth, in spite of a deceleration in the growth of new orders, with the domestic market being a significant driver of production.
The seasonally-adjusted Riyad Bank Saudi Arabia Purchasing Managers’ Index (PMI) remained stable at 57.0 in April, equal to the March figure, and comfortably above the threshold of 50.0, which signifies growth in the sector.
Although the Output subindex witnessed a minor decline to 61.9 in April from the six-month peak of 62.2 in March, it still denoted robust demand conditions, especially within the Wholesale & Retail sector, which saw the most pronounced increase in output.
This uptrend hints at an anticipated spike in the non-oil GDP, likely exceeding the 4.5% mark for this year,
stated Naif Al Ghaith, chief economist at Riyad Bank, commenting on the overall PMI.
He also noted the significant rise in new orders and the expansion of inventories, which he interpreted as a proactive response to the growing market demand.
Despite the slower growth in new orders in April, with a reading of 61.0 compared to 64.0 in March, sales remained robust due to strong domestic business conditions. Additionally, export orders continued to grow, with the manufacturing sector being a key contributor.
The Saudi Arabian economy experienced an estimated contraction of 1.8% year-on-year in the first quarter, largely due to a decline in oil-related activities impacting overall growth.
However, the non-oil GDP exhibited a 2.8% year-on-year increase based on preliminary government data, although quarterly figures showed a slight softening in momentum with a 0.5% rise from the previous quarter and a 1% decrease in government activities.
Nevertheless, the business outlook over the next 12 months remained positive in April, with optimism widespread across various sectors, according to the survey.