Saudi PMI declines to 58.5 pts in May

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The seasonally adjusted Riyad Bank Saudi Arabia Purchasing Managers’ Index (PMI), formerly the S&P Global Saudi Arabia PMI, dropped to 58.5 points in May 2023. 

The index's two largest components, new orders and output, witnessed a decline, while Saudi Arabia's non-oil private sector continued to see a strong improvement in operating conditions in May, as rising market demand led to another steep increase in economic activity.

Demand strength underlined further uplifts in output, employment and purchasing, with staff levels rising at the fastest rate since January 2018. However, a recent run of strong wage pressures meant that firms' output prices rose sharply in May, with the pace of inflation accelerating to the highest in nearly three years.

New order inflows at non-oil private sector businesses continued to rise considerably in May, after growth quickened to its highest in just over eight-and-a-half years in April. The rate of expansion slowed slightly, despite a renewed upturn in sales from foreign clients.

Outlook in Saudi Arabia remained positive in May, with businesses anticipating better market conditions, strong sales and supportive government economic policy to aid growth prospects. However, rising competition meant that firms were not as confident as in April, with sentiment dropping to the lowest in exactly one year.

*Change on a monthly basis

The PMI is a weighted average of the following five indices: