Saudi non-oil private sector records highest demand since lockdown

Published 06 Jan,2021 via Asharq Alawsat (English Edition) - The Saudi non-oil private sector registered its best recovery rate in a year, that is, before the Kingdom’s adoption of the lockdown measures to prevent the outbreak of Covid-19.

An international indicator revealed that sales of the private sector in the Kingdom recorded a significant growth at the end of 2020, thanks to an increase in new businesses, which in turn boosts the process of overcoming the negative effects of the pandemic.

According to IHS Markit, the headline seasonally adjusted IHS Markit Saudi Arabia Purchasing Managers’ Index (PMI) rose to its highest reading for 13 months in December, up from 54.7 in November to 57.0, signaling a sharp improvement in operating conditions. In addition, the index marked a fourth successive month of expansion and was broadly aligned with its average level of 56.9.

HIS Markit said that the rise in the headline index was driven by marked increases in both the output and new orders sub-components. It added that the latest data highlighted the fastest upturn in new business for a year, which HIS Markit panelists attributed to improving market demand and price discounts at some companies.

Commenting on the survey results, David Owen, Economist at IHS Markit, said: “The Saudi Arabian non-oil economy is well on the path to recovery, according to December’s PMI results, which indicated the strongest output growth since November 2019. Moreover, the PMI is now (just) above its series trend level, suggesting the economy is growing at a relatively normal pace, albeit with a lingering output gap to recover.”

“According to respondents, business activity has been helped by falling COVID-19 case numbers in the fourth quarter of 2020, despite other major economies suffering a ‘second wave’. The roll-out of a vaccine meanwhile led to increased optimism that demand will strengthen over the coming year,” Owen added.

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