The September PMI for Saudi Arabia landed at 58.5 points, a low point in the last 7 month period.
The private sector in Saudi Arabia experienced stable growth throughout September, despite that rate of growth being slower than it has been for over half of a year. A boost in domestic orders was not able to completely offset the drop in export orders, according to a recent survey of purchasing managers.
The PMI for Saudi (also known as the HSBC Purchasing Managers’ Index) is a method of measuring the growth of private businesses in the kingdom with the leading Gulf Arab economy. The PMI dropped from the August figure of 59.1 points to 58.5 in September. The current figure is still on the positive side, being well above the 50 point mark that is considered the dividing line between contraction and expansion.
The PMI reached a peak in June hitting 61.4 points before falling to 59.1 points by August. The index is adjusted seasonally.
September’s PMI was the third consecutive month of decline after the June peak, although the current rate is still considered to indicate steady expansion in the nation according to Markit Economics.
The data in September indicated that domestic markets are still the main driving force in the growth of the Saudi private business economy. Total activity in the domestic market was significant, while the increase in new export ordering was subdued.
The sub-index for new orders experienced the slowest rate of growth since the month of February.
Markit Economics noted that participants in the survey stated the presence of strengthening market demand and a positive business climate, despite the fact that September’s PMI measurements have slowed.
The output sub-index within the PMI showed a sharp increase, although the rise is smaller than it has been in the last six months.
Even those increases were not enough to clear out the backlogs that are still moderately piling up. Certain participants in the study mentioned that the nation’s ports are still experiencing delays in shipments.
Governor of the central bank in Saudi Arabia, Muhammad al-Jasser, recently noted that the oil-based economy is expected to experience 3.5 per cent growth this year, a sharp increase from the 0.6 per cent growth that occurred in 2009.
The authorities in Saudi Arabia are working at job creation in the private sector as the native population continues to grow rapidly. The unemployment rate in Saudi is steady at about 10 per cent and the current population is made up of about one third expatriates.
Markit noted that the private sector was recruiting throughout September in an effort to meet new orders, demands and business expansions.
This survey has recorded an increase in employment each month since it began in August of last year. This September saw moderate job creation growing quicker than the August rate.
Detailed data related to the PMI is only available from Markit and requires an appropriate license that is obtained through an application to Markit Economics.Paul Holdsworth, Staff Writer, Gulf Jobs Market News