Saudi PMI rises to 53.8 points in August

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The seasonally adjusted Riyad Bank Saudi Arabia Purchasing Managers’ Index (PMI), formerly S&P Global Saudi Arabia PMI, rose to 53.8 points in August.

The reading pointed to a notable improvement in business conditions across the non-oil private sector. It was the highest in six months and signaled expansion for a fifth consecutive month, although it remained below the survey’s long-term average of 56.8 points.

The recovery was driven by a notable increase in output as companies benefited from stronger demand and a continued recovery in market activity. However, external conditions remained challenging, with new export orders falling again amid regional tensions, while persistent cost pressures weighed on companies’ ability to protect profit margins.

Business activity increased notably in August, with the rate of expansion reaching a seven-month high and approaching its long-term average.

According to panel reports, growth was underpinned by improved sales volumes and a recovery in market conditions.

New orders expanded for the fifth consecutive month following a slight decline in March. However, the picture remained mixed, as some companies reported sales challenges due to intense competition and excess supply.

Export conditions also remained difficult, with new international orders falling sharply and at a faster pace than in July.

Saudi PMI since the beginning of 2023*

*Change on a monthly basis.

The Riyad Bank PMI is a weighted average of the following five sub-indices:

Riyad Bank PMI Components