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Saudi PMI hits five-month high in July

Saudi PMI hits five-month high in July
The 12-month outlook for non-oil business activity improved in July

Riyadh – Mubasher: Saudi Arabia’s non-oil private sector economy was stable at the start of the second half (H2) of 2020, with the headline seasonally adjusted IHS Markit Saudi Arabia Purchasing Managers' Index (PMI) rising to 50.0 in July from 47.7 in June, signalling overall stability in operating conditions.

The volume of new orders placed with Saudi non-oil private sector companies was significantly stable in July, following four months of decline due to the COVID-19 lockdown. According to data, domestic demand was resilient, although new export orders continued to fall sharply.

"The July PMI scoring exactly 50.0 is a clear indication that the Saudi non-oil private sector is over the worst of the disruption caused by the pandemic, but remains some way from 'normal' business conditions. The latest figure is the highest since February but well below the long-run trend level of 57.1." said, economics director at IHS Markit, Trevor Balchin. 

"Indicators for output, new orders, and jobs all rose in July but fell short of the 50.0 mark, meaning that the PMI would have remained below 50.0 were it not for a solid rise in stocks of purchases and longer suppliers' delivery times,” he added.

Although the 12-month outlook for non-oil business activity improved in July, the sentiment was relatively subdued as the volume of outstanding business fell for a record sixth consecutive month. The Future Output Index rose back above the 50.0 neutral mark to a five-month high, the report concluded.