Saudi PMI hits 9-month low at 53.9 points in December: IHS Markit

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Saudi Arabia Purchasing Managers’ Index (PMI) for December 2021 fell three points to 53.9 points – its lowest level since March 2021 - from 56.9 points in November, IHS Markit said in its latest report.

The reading was the lowest since March, but still indicated a solid improvement in operating conditions across the non-oil private sector economy. The three-point drop was mainly driven by the New Orders subindex, which also fell to a nine-month low in December.

Saudi Arabian non-oil firms registered a marked slowdown in growth at the end of the year. Output levels rose at the softest rate since August, while a sharp slowdown in new order growth led to lower backlogs and subdued hiring activity.

Price pressures on raw materials and other inputs meanwhile drove the fastest rise in overall costs since June. Consequently, the outlook for future activity weakened to an 18-month low.

The signalled rise in new business was sharp, but nevertheless much softer than those seen in recent months. Concerns about the spread of the new Omicron variant had impacted customer spending and led some firms to withhold orders. In addition, new business from abroad rose modestly and at the weakest rate since April.

Efforts to expand purchasing activity were extended in December, as input buying rose at a similarly sharp pace to those seen in October and November. Stocks of inputs meanwhile rose at the strongest rate since May, as firms reported that purchases were delivered more quickly by vendors in response to their requests.