Saudi Arabia Purchasing Managers’ Index hits 3-month high: IHS Markit

Riyadh city

Saudi Arabia Purchasing Managers’ Index (PMI) rose to 55.2 points in April, the highest in three months, compared with 53.3 points in March, IHS Markit said in a recent report.

Business activity rose at the sharpest rate for the three months, as new sales increased markedly. Moreover, firms expanded staff numbers for the first time in five months and to the greatest extent since November 2019.

The rise in PMI indicates a marked improvement in business conditions in the non-oil private sector economy. Growth has now been recorded in each month since September 2020.

Faster new business growth contributed to a sharp rise in input purchases during April, with the rate of expansion quickening to a three-month high. Subsequently, stocks of purchases were built up at the most marked rate for almost a year-and-a-half, as firms increased holdings in anticipation of a further strengthening in client demand, the report said.

It added that despite problems with the arrival of inputs at some companies due to global supply chain issues, average vendor performance improved for the third time in four months. Firms reported that an easing of COVID-19 restrictions had allowed local suppliers to increase their capacity.

Nevertheless, global supply problems contributed to a marked rise in freight charges during April, which was exacerbated by increasing oil prices. There was also an uptick in raw material prices which helped lead to a quicker rise in overall input costs compared to March.