Dubai
Saudi Arabia Purchasing Managers’ Index (PMI) rose marginally to 56.5 in April from 56.4 in March, signalling continued strong growth in the non-oil private sector last month. Both output and new orders increased at a slightly faster rate in April, despite a marginal decline in new export orders
Business conditions in Saudi Arabia’s non-oil private sector continued to improve at the start of the second quarter, with rates of expansion in new work and business activity gathering pace. As a result, firms were encouraged to engage in purchasing activity, which in turn led to the strongest accumulation in stocks of purchases in over four-and-a-half years.
Despite added pressure on operating capacity, the rate of job creation remained only marginal overall. Meanwhile, input cost inflation climbed to an eight-month high, but selling prices rose only fractionally amid competitive pressures.
“This was another overall strong reading of Saudi Arabia’s non-oil private sector activity, with output and new orders growth both very firm in April. However, below the surface it remains clear that companies are having to work harder to generate these gains, with little capacity to increase employment and profit margins continuing to be squeezed,” said Tim Fox, Head of Research and Chief Economist at Emirates NBD.
Business optimism eased slightly from the high March reading, to come in at 64.9. Nearly 30 per cent of firms expect output in 12 months’ time to be higher than today, while the other 70 per cent of respondents expect output to remain at current levels.
Non-oil private sector companies in Egypt signalled a deterioration in overall business conditions for the nineteenth consecutive month in April. Marked falls in output and new orders contributed to the overall downturn, although in both instances rates of decline were slower. In response to fewer output requirements, firms decreased their payroll numbers and purchasing activity. Currency weakness and a general increase in market prices were the key factors that led to increases in input costs and output charges.
The headline PMI rose to a nine-month high of 47.4 in April, from 45.9 in March. In line with the trend for output, new business across Egypt’s non-oil private sector declined at a marked, but slower pace.
