Dubai: Saudi Arabia’s business conditions improved at the slowest rate since the purchasing managers index survey began, with the headline PMI falling to 52.8 in March, from 53.2 in February.
“The fall in the pace of expansion in Saudi Arabia’s non-oil private sector to its lowest levels on record last month will prompt firms to continue price discounting in a bid to galvanise demand; output prices were below the neutral 50 level which delineates contraction and expansion for the second month running in March,” said Daniel Richards, Middle East and North Africa Economist at Emirates NBD.
Despite the sluggish growth at present, business optimism at 71 remains far above the 12-month average of 61.4. Incoming new business grew at the slowest rate on record during March. The expansion was only fractional overall.
The recent introduction of value-added tax (VAT) continued to damp customer demand, whilst panel respondents also commented on competitive pressures.
Furthermore, foreign demand deteriorated for the second month running. In terms of prices, input cost inflation eased to a ten-month low during the latest survey.
March PMI data for Egypt showed the non-oil private sector companies continued to report falling output during the latest survey period. Some firms linked the deterioration to softening domestic demand. Headline PMI stood at 49.2 in March, above its long-run average.
Price data pointed to easing inflationary pressures across the Egyptian non-oil private sector, with both input prices and output charges increasing at softer rates.
Moreover, average cost burdens rose at the slowest pace registered for 30 months. Meanwhile, new export orders improved for the third month running. The level of incoming new business in the Egyptian non-oil private sector was unchanged since the previous month.
