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Non-oil business activity in the Kingdom continued to grow in July, as output levels, purchasing activity, and new exports rose, despite a lull in new orders and growing competitive pressures, according to the Riyad Bank Saudi Arabia PMI (pdf). The headline figure dipped to 54.4 in July, from 55.0 in June.
Soft but steady: Despite falling for a third month straight, the reading remains firmly above the 50.0 mark that separates contraction from growth. July’s reading is also the lowest since January 2022.
New order intakes increased at their lowest rate in some 2.5 years on the back of growing input costs, while selling prices dropped due to strong internal competition and capacity pressures caused by an ongoing heatwave. Output growth eased to its lowest level in six months and new orders hit their lowest mark in two and a half years despite demand conditions pushing up sales and output growth.
Purchasing activity surged at the steepest rate in three months, buoyed by growing client demand as firms look to solidify their stock inputs. Employment figures also rose modestly in July in a bid to maintain backlogs in the Kingdom’s non-oil sector despite capacity stresses due to the heatwave. Delivery speed continued to improve. Balanced input prices, cost of purchases and staff costs eased inflationary pressures, by stabilizing output prices.
On a positive note: New exports also grew, indicating that “Saudi businesses are successfully penetrating international markets, which bodes well for diversification of the economy,” Riyad Bank Chief Economist Naif Al Ghaith said.
FROM THE REGION-
The UAE’s PMI slipped to 53.7 in July, from 54.6 in June, recording the slowest pace of expansion in almost three years, according to S&P Global’s PMI (pdf).
Egypt’s PMI dipped slightly to 49.7, from 49.9 in June, marking its second-highest level in three years despite remaining in contraction territory, according to S&P Global’s Egypt PMI (pdf).
Kuwait’s headline figure remained almost unchanged in July at 51.5, recording modest improvement in business conditions in July as new orders, output, and purchasing activity all grew at a faster rate compared to the month prior, according to Kuwait’s S&P Global PMI (pdf).
Qatar’s non-energy private sector signaled strong growth as boosts to new orders, output, and purchasing buoyed the index, according to Qatar Financial Center’s PMI (pdf). Qatar’s headline number dipped to 51.3 in July, falling from a 23-month high of 55.9 recorded in June.
