Saudi PMI rises to 51.5 points in April

The seasonally adjusted Riyad Bank Saudi Arabia Purchasing Managers’ Index (PMI), formerly S&P Global Saudi Arabia PMI, rose to 51.5 points in April, signaling a modest recovery in operating conditions after disruptions due to the Middle East war in March.

The index had declined for five consecutive months, with the previous month marking the second-largest drop since the survey began in 2009.

Non-oil private sector companies returned to growth in April as firms increased output in response to rising new orders, continued progress on existing projects and mild improvements in order books.

However, the overall rate of business expansion continued to be dampened by deferrals in client spending decisions amid the Middle East conflict, while shipping disruptions continued to impact supply chains

Non-oil companies experienced a rapid increase in cost burdens in April as regional instabilities impacted raw material and freight prices. Overall input costs rose at the fastest rate in the survey's history, driving a near-record increase in selling charges.

New business received by non-oil companies improved in April, following a decline one month earlier, supported by higher customer numbers and stronger demand.

However, the rate of sales growth remained relatively mild, with delays in client spending and investment decisions reportedly offsetting gains. Anecdotal evidence indicated that caution surrounding the Middle East conflict had weighed on purchasing decisions. Domestic sales drove the upturn, whilst new export orders declined at the fastest rate in the survey's history

Overall business activity expanded in April after March's contraction, although the pace of expansion was historically muted. Higher output was linked to progress on existing projects and mild improvements in order books.

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