Dubai: Saudi Arabia’s Purchasing Managers’ Index (PMI) improved marginally in October, with the headline figure rising from 53.4 in September to 53.8 as employment and new order growth picked up.
“The headline Emirates NBD Saudi Arabia Purchasing Managers’ Index rose slightly. New export orders also recovered after contracting in September, reflecting increased external demand,” said Khatija Haque, head of Mena Research at Emirates NBD.
“However, output rose at the slowest rate since April, suggesting that the rise in new work has yet to feed through to actual output.”
The employment index rose from 50.7 in September to 51.3 in October, recording its highest reading since March. However, it still indicates only a modest increase in jobs with only 3.1 per cent of firms surveyed indicating they had hired more staff last month.
Output prices increased modestly in October after declining in the prior three months. At the same time, input costs declined slightly last month on lower purchase costs, providing some relief for firms’ margins.
Business optimism about future output increased markedly in October, with nearly half of all firms surveyed expecting their output to be higher in a year’s time, while the other half expected current levels of output to be sustained.
“The rise in Brent oil prices to over $80 [Dh293.84] per barrel on average last month — the highest level since October 2014 — likely contributed to improved business sentiment, and the government also signalled increased budget spending in 2019 in its pre-budget statement released in October,” Haque said.
PMI for Egypt fell fractionally from 48.7 in September to 48.6 in October. The latest reading indicated a slightly quicker, but still modest deterioration in business conditions at Egyptian non-oil private sector companies.
Business activity contracted across Egypt’s non-oil private sector in October. This marked the second successive month where output decreased, with respondents citing a lack of market demand. As such, employment levels dropped during October. The rate of job shedding was the fastest since March and partly attributed to a number of employees leaving for new positions.
At the same time, backlogs of work grew for the fourth successive month, albeit marginally.
On the price front, firms increased their output charges at the weakest rate in ten months. This was linked to a softer rate of input price inflation, although many still observed a rise in raw material costs, gasoline prices and staff wages.