Saudi non-oil growth stays solid in July as demand improves, PMI shows

Saudi Arabia’s non-oil private sector expanded solidly in July as domestic demand improved and output stayed strong despite weaker export sales, a business survey showed on Tuesday.

The Riyad Bank Saudi Arabia Purchasing Managers’ Index (PMI), compiled by S&P Global, fell to 53.1 in July from 53.3 in June, the survey by S&P Global showed.

The 50-mark separates growth from contraction.

“The latest survey suggests that domestic demand is gradually strengthening as market conditions normalize following recent regional disruptions, supporting sustained increases in both output and new orders,” said Naif Al-Ghaith, Chief Economist at Riyad Bank. New business growth moderated from June and remained mild by historical standards.

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Export demand stayed under pressure, with new export orders falling for a fifth consecutive month.

The decline was still steep, but the slowest in the current sequence as elevated freight charges and competition continued to weigh. Employment increased marginally after stagnating in June, although the pace remained much weaker than at the start of the year.

Input cost inflation eased to a four-month low, but remained sharp, while staff costs rose at the fastest pace in five months.

Firms were less upbeat about the year ahead after confidence hit a five-month high in June.