Saudi Arabia's non-oil private sector grew last month at the slowest pace since March, marking its 16th consecutive month of expansion, amid rising concern over the spread of the Omicron variant of the coronavirus, a survey showed on Tuesday, Trend reports with reference to Reuters.
The seasonally adjusted IHS Markit Saudi Arabia Purchasing Managers' Index (PMI) dropped to 53.9 in December from 56.9 in November, marking solid growth but falling well below 2021's average of 55.8 and the series average of 56.8.
Growth in output slowed, with the subindex at 57.3 in December compared with 61.7 in November.
Growth in new orders weakened for a third straight month to hit its slowest pace since March, while the expansion in new export orders slowed to an eight-month low.
"The latest data pointed to particularly sharp slowdowns in new order growth across manufacturing and services, as panelists often commented on canceled bookings and weaker client demand," said David Owen, economist at survey compiler IHS Markit.
This led to a faster decrease in outstanding work as businesses had more time to complete orders. Sufficient capacity to deal with the workloads also meant a drop in the employment subindex to a four-month low, only fractionally above the neutral 50 mark.
Sentiment for future output weakened for a third consecutive month, with the subindex slipping to 53.6 in December from 56.3 in November, with just 8% of firms surveyed optimistic about output growth over the next year.
"The slower pace of economic recovery prompted firms to give a weaker projection for future output, with confidence slipping to an 18-month low. Alongside the Omicron variant, faster inflation and strong competition were also mentioned by companies with a downbeat outlook," Owen said.