Saudi PMI slips to in July as business activity expansion hits lowest level in over 3 years
The Riyad Bank Saudi Arabia PMI slipped to 56.3 in July, down from 57.2 in June, on the back of a slowdown in new orders growth and business confidence easing, according to the survey.
Higher competition and lower customer footfall weighed on businesses further, while some panellists reported difficulties in gaining new foreign clients, leading to a decrease in new export orders for the first time in nine months.
While July recorded inventory growth amongst manufacturers and wholesale and retail firms, new input purchases rose at a much slower pace compared to June. Delivery times shortened on balance; however, the rate of improvement eased sharply due to customs delays.
Despite concerns, work on existing projects and incoming new orders helped to sustain growth, the report added.
'Businesses continued to see improved demand, but competitive pressures and more cautious client spending weighed on the pace of expansion,' Naif Al-Ghaith, Chief Economist at Riyad Bank, said. 'External demand was also softer, while purchasing activity rose at a slower pace.'
Non-oil sector firms reported an uplift in employment levels in July, citing domestic demand conditions, signalling 'the fastest uplift in over 14 years,' the report said.
Input price pressures across the Saudi Arabian non-oil sector was strong during July, the survey stated, although the rate of inflation slowed slightly from the second-quarter average.
Rising input costs resulted in a markup in prices charged for the second month running.
Expectations for future activity softened notably from June's two-year high in July.
Al-Ghaith said firms expect activity to pick up over the coming year, supported by steady demand, strong pipelines, and ongoing investment tied to Vision 2030.
(Writing by Bindu Rai, editing by Brinda Darasha)
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