The Saudi non-oil private sector grows for the second consecutive month

DUBAI (Reuters) – Saudi Arabia’s non-oil private sector expanded for a second month in a row in October as production grew at a solid pace, although concerns persisted about the pace of recovery from the coronavirus pandemic, a survey showed on Tuesday.

Saudi Arabia’s seasonally adjusted IHS Markit Purchasing Managers Index (PMI) rose to 51.0 in October from 50.7 in September. The 50.0 mark separates growth from contraction.

The non-oil private sector contracted every month from March to August, with the exception of July, when it remained stable at 50.0.

“While the latest PMI data indicated further expansion in Saudi Arabia’s non-oil private sector in October, there was new reason for new concern about the pace of recovery from the COVID-19 outbreak,” said David Owen, economist at the IHS survey compiler. Mark it.

“Sales growth slowed at a barely marginal rate, following a renewed rebound in September, which was partly due to a drop in export demand. Furthermore, the number of jobs continued to fall, and the rate of decline accelerated for the first time since June. “

Non-oil private sector employment contracted for the eighth consecutive month as companies laid off staff and new hires were limited despite increased demand. Employment fell slightly faster than in September, although the drop was still slight.

New orders grew for the second month in a row, albeit at a slower pace, with the sub-index falling to 50.7 from 52.1 in September as customer financial problems and a lack of tourists affected sales growth. .

Production grew faster than in September, from 50.4 to 52.9, although it remained below the long-term average of the sub-index. Increased demand contributed to increased activity, but a weak recovery rate and the continued impact of the COVID-19 pandemic held back growth.

“Many companies are hopeful that growth will strengthen in the next 12 months, but there are still a large number of companies that are not sure that markets can fully reactivate with COVID-19 infections that are still prevalent throughout the world, ”Owen said.