Mubasher TV
Contact Us Advertising   العربية

Saudi Arabia’s August PMI falls to 11-month low

Saudi Arabia’s August PMI falls to 11-month low
Photo Archive

Riyadh – Mubasher: The headline seasonally adjusted Purchasing Managers’ Index (PMI) of Saudi Arabia dropped to 56.6 in August 2023 from 57.7 during July this year.

The headline PMI was its weakest since September 2022 due to a sizeable drop in the rate of activity growth, according to Riyad Bank’s latest data.

Overall, the uplift in activity was still strong, as firms witnessed higher new orders and market growth.

Non-oil firms reported only marginal changes to their selling prices midway through the third quarter (Q3). The rate of input cost inflation accelerated to the fastest in just over a year, driven by a sharper uptick in purchase prices.

Employment levels in the non-oil economy jumped in August, with the rate of job creation picking up from July. Growth in sustained new business contributed to hiring, with some mentioning the recruitment of marketing staff. 

Naif Al Ghaith, Chief Economist at Riyad Bank, commented: “The Kingdome’s non-oil activities have managed to expand despite the continuous challenges arising from input prices and the high-interest rates.”

“Tighter monetary policy dampens consumption and investment, reducing demand for consumer and business products. However, the non-oil economy has not displayed much of the tighter monetary policy symptoms,” Al Ghaith underlined.

He noted: “Both employment and wages continue to increase in response to firms’ expansions. However, the pace of staff cost inflation was notably slower than that of purchasing costs."

The Chief Economist said: “With these expansions, prices were not able to respond to tighter monetary policy and increased. But with the greater competition, firms are not passing these on to customers via higher output prices.”

“This has made us maintain our previous projection of inflation to average below 3% for 2023,” he concluded.