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Saudi non-oil conditions hit 10-year high

Medina, Saudi Arabia: the kingdom's non-oil sector showed strong growth in the latest figures Pexels/Sami Türk
Medina, Saudi Arabia: the kingdom's non-oil sector showed strong growth in the latest figures
  • Saudi non-oil sector buoyant
  • Egyptian conditions improved
  • PMI falls in Turkey

Business activity and sentiment in Saudi Arabia’s non-oil sector has reached its highest level in over a decade.

Saudi Arabia’s Purchasing Managers’ Index (PMI) score hit 60.5 in January, up from 58.4 in December – its highest since September 2014.

The pace of input price inflation at Saudi non-oil companies in January was the second-fastest in almost four-and-a-half years.

Compiled by S&P Global, the PMI is a headline figure measuring business sentiment based on factors including new orders, output, employment, delivery times and stocks. A figure above 50.0 reflects a positive outlook, and below it, negative expectations.

Egypt’s PMI figure hit a 50-month high, rising to 50.7 in January, up from 48.1 in December and signaling a renewed improvement in the health of the Egyptian non-oil economy.

The UAE PMI figure was down slightly from the nine-month high of December at 55.0 as businesses struggled with increased demand and administrative issues “such as slow payment”.

As a result, backlogs accumulated at the fastest rate for eight months and non-oil companies chose to increase prices for the first time in four months.

“Strong competition and cash flow concerns arising from heavy backlogs have appeared to sow doubt among firms that they can continue to boost their revenues, underlining efforts to reduce the gap between output and input prices,” said David Owen, senior economist at S&P Global Intelligence.

In Qatar, average wages and salaries increased at a new record pace in January, particularly in the manufacturing sector, surpassing the previous peak set last September.

Ironically it came as new business fell for the first time in over a year, attributed largely to a drop-off in construction work. This contributed to a fall in the PMI from 52.9 in December to 50.2 in January.

The headline PMI in Turkey posted 48.0 in January, down from 49.1 in December and below the 50.0 no-change mark for the 10th consecutive month.

Kuwait’s PMI posted 53.4 in January, down from 54.1 in December — a drop, but still comfortably above the 50.0 no-change mark, which implies a solid monthly improvement in business conditions.