Saudi Arabia’s non-oil private sector grew for the second month in a row as the Kingdom’s economy looks to recover from the economic fallout of the coronavirus pandemic, IHS Markit’s October Saudi Arabia PMI report showed.
The Purchasing Managers Index (PMI) is a measure of performance of the non-oil private sector. In October, the Kingdom registered 51 on the index, up from 50.7 in September, and the highest reading seen in eight months. A figure above 50 indicates an increase in business activity, while below 50 indicates a decrease.
“While the latest PMI data indicated a further expansion in the Saudi Arabia non-oil private sector in October, there were reasons for fresh concern about the pace of recovery from the COVID-19 outbreak,” David Owen, economist at IHS Markit, said in a statement.
“Sales growth slowed to just a marginal pace, after a renewed upturn in September, that was in part due to a drop in export demand. Moreover, job numbers continued to fall, with the rate of decline accelerating for the first time since June,” Owen added.
IHS Markit also warned that new business expanded more slowly than in September amid weak export volumes while corporate spending further fell.
Some respondents to the survey also said that they had been facing financial issues among their customers – constraining sales recovery.
“Firms indicated that financial issues at some clients and a slow resumption of projects have curbed the economic rebound since restrictions eased,” Owen said.