Saudi PMI reaches 15-month high; employment continues to fall

      Published on Friday, 12 February , 2021      920 Views     
Saudi PMI reaches 15-month high; employment continues to fall

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.

But employment fell for the 10th time in 11 months, as businesses used excess capacity to meet rising demand, according to IHS Markit Saudi Arabia PMI, released on Wednesday.

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.

The report said new work levels had led to a sharp increase in purchasing activity, but employment fell as some firms saw capacity exceed prevailing demand.

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

Category Business, Saudi News | 2021/02/12 latest update at 1:00 PM
Source : Zawya | Photocredit : Google
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