Non-oil growth remained strong in Saudi Arabia in the first month of 2021, as business activity soared amid rising new work levels and faster upturn in export sales.
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The Purchasing Managers Index (PMI) reached 57.1 in January, up from 57 in December 2020, with any reading above 50.0 indicating growth on the previous month.
However, as COVID-19 vaccines began to be rolled out, firms also remained hopeful of a substantial economic recovery over the coming year, with the kingdom’s comparatively low case numbers contributing to recovery.
David Owen, Economist at IHS Markit, said:
“Non-oil activity growth continued to accelerate in the new year, pointing to a further recovery in business conditions in Saudi Arabia after the impact of the COVID-19 pandemic.
“The country has been helped by low case numbers, while other parts of the world have suffered a spike in infections that risks derailing the upturn in the global economy.”
The report concluded that business expectations for the forthcoming 12 months were upbeat in January, reflecting optimism for the global roll-out of COVID-19 vaccines and the predicted positive impact on the economic recovery. Optimism eased from December, the report said, but it was still the second-strongest in a year.
“Businesses meanwhile hope that the roll-out of COVID-19 vaccines will bring further growth in 2021 and improve output to pre-COVID levels,” said Owen.
“Around six times as many firms expect a rise in output over the next 12 months as those that forecast a decline.”
Reporting by Imogen Lillywhite
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