Riyadh – Mubasher: Economic conditions in Saudi Arabia continued to strengthen in February 2021, albeit the growth rate eased to a four-month low as both output and new orders expanded at weaker rates, according to a survey.
The headline seasonally adjusted IHS Markit Saudi Arabia Purchasing Managers’ Index (PMI) dropped to 53.9 in February from January's high of 57.1 and was the lowest recorded in four months.
However, the PMI remained above the 50.0 growth threshold and suggested a further recovery in business conditions from the initial impact of the Covid-19 pandemic.
Employment lagged the recovery in output again as firms reduced job numbers for the third successive month, although input purchases and inventories continued to climb.
Meanwhile, firms remained hopeful that the impact of Covid-19 will lessen over the coming year, despite business optimism falling to the lowest since last October.
Economist at IHS Markit, David Owen, said, "The economic recovery in Saudi Arabia’s non-oil private sector lost some momentum in February, with the PMI dropping from 57.1 in January to 53.9 to signal the softest rate of improvement in four months. Nevertheless, the sector remained broadly on the right track, with new business inflows and export sales continuing to rise whilst firms also built inventories in anticipation of stronger future growth."
"Sentiment data suggests that companies expect a rocky start to 2021 as some countries remain under lockdown measures, but the rollout of COVID-19 vaccines around the world should bring a steep improvement in economic activity in the latter half of the year as the pandemic begins to ease," Owen added.