World Economy

Saudi Non-Oil Growth Hits Six-Month High

Saudi Non-Oil Growth Hits Six-Month HighSaudi Non-Oil Growth Hits Six-Month High

Growth in Saudi Arabia’s non-oil private sector accelerated to a six-month high in March, while it slowed to a 17-month low in March in the UAE as expansion of both output and new orders eased, surveys of businesses showed.

The seasonally adjusted SABB HSBC Saudi Arabia Purchasing Managers’ Index rose to 60.1 points last month from 58.5 points in February, indicating the country’s economy continues to comfortably ride out low oil prices. The 50-point level separates expansion from contraction, Reuters said.

The Saudi government has continued spending heavily on economic development and welfare projects despite the plunge of oil prices since last June. It is drawing down its huge foreign currency reserves to cover its budget deficit.

Output growth surged to 67.6 points in March, its fastest since June 2011, the survey showed. New order growth accelerated to 67.3 points.

Employment growth slowed slightly but remained strong at 53.7 points. Output price inflation edged up to 50.4 points but input price inflation increased faster, to 53.7 points. Detailed PMI data are only available under licence from Markit and customers need to apply to Markit for a license.

 UAE Index

The HSBC UAE Purchasing Managers’ Index fell to 56.3 points last month from 58.1 in February. The 50-point level separates growth from contraction in the survey of 400 firms.

“Rates of expansion eased for the second month running and were below those seen through much of last year,” said Philip Leake, economist at data provider Markit. “As a result, workforce numbers rose at the slowest pace in three years.”

Output growth dropped to 60.7 points from 64.3, while new order growth slowed to 61.6 from 63.3. However, growth in export orders actually accelerated because of strong demand in neighboring countries. Employment growth fell to 51.3 points.

Input costs and output charges fell simultaneously for the first time in five years, which the survey attributed to stiff competition among suppliers. Input price inflation tumbled to 49.3 points from 53.6; output price inflation edged up to 49.2.