New orders boost growth in Saudi Arabia's non-oil businesses

Growth in Saudi Arabia’s non-oil private sector accelerated in May because of a sharp increase in new orders, a survey of businesses showed on Sunday.

The seasonally adjusted Emirates NBD Saudi Arabia Purchasing Managers’ Index rose to 54.8 last month from 54.2 in April. The 50-point mark separates expansion from contraction.

“The rise in the Saudi PMI to the highest reading in six months is encouraging, as it shows the resilience of the non-oil economy even in the face of tighter fiscal policy,” said Khatija Haque, head of regional research at Emirates NBD. “Domestic demand remains robust, even as export demand has softened.”

Output growth slipped down to 60.6 from 60.9, but growth in new orders rose to 58.1 from 56.2. Employment growth also rose.

Output price deflation intensified in May, with prices falling for a seventh straight month. Input price inflation slowed.

Some other economic data in the last few months has suggested a deeper slowdown in the Saudi economy than the PMI figures. M3 money supply shrank 1.5 per cent from a year earlier in April.

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