September 3, 2019 / 4:21 AM / 14 days ago

Saudi non-oil private sector growth edges up in August: PMI

DUBAI (Reuters) - Growth in Saudi Arabia’s non-oil private sector improved slightly in August as output increased, backed by stronger domestic demand, a survey showed on Tuesday.

The seasonally adjusted IHS Markit Saudi Arabia Purchasing Managers’ Index (PMI) went up to 57.0 in August from a five-month low of 56.6 in July. Any reading above the 50 mark indicates expansion.

Growth has picked up this year after suffering in 2018 because of increases in fuel prices and the introduction of a 5% value-added tax.

The PMI averaged 56.8 from January till August, against a 53.6 average for the same period last year.

“August PMI data for Saudi Arabia revealed a stronger improvement in economic conditions,” said Amritpal Virdee, Principal Economist at IHS Markit and author of the report.

“A bright spot was a quickening of both output and overall new order growth, which outweighed weaker job creation and helped improve overall business conditions at a faster rate.”

Output growth increased to 60.7 from a five-month low of 59.2 in July, and new orders edged up to 63.5 from 63.4 a month earlier.

New export orders slipped to 52.7 from 53.2, showing domestic demand was driving new business.

Employment levels remained subdued in August, with the sub-index decreasing to 50.1 from 50.4 a month earlier – the joint-weakest rate of growth since employment started increasing in April.

Reporting by Davide Barbuscia; Editing by Hugh Lawson

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