Saudi private sector growth starting to rebound from slump
Growth in Saudi Arabia’s non-oil private sector accelerated in June to its fastest rate this year as the economy showed signs of emerging from a severe slump triggered by government austerity policies, a survey of companies showed on Tuesday, Reuters reports.
The seasonally adjusted Emirates NBD Saudi Arabia Purchasing Managers’ Index rose to 55.00 last month from 53.2 in May. A level above 50 indicates expansion.
In April, the PMI dropped to its lowest level since the survey was launched in 2009 as private businesses were hit by the introduction of 5 percent value-added tax and domestic fuel price hikes at the start of this year.
Since then, however, there have been some signs that private sector activity is bottoming out, helped by higher oil prices, which promise to allow the government to spend more on supporting growth.
“The rise in the headline PMI to the highest level this year reflects a strong recovery in new orders, including export orders, and output,” said Khatija Haque, head of regional research at Emirates NBD.
Output growth jumped to 59.1 in June from 56.9 in May while growth of new orders surged to 58.7 from 54.7. Employment growth rose slightly to 51.1.
Output price inflation slowed to 50.4 as input price inflation rose to 53.6.