Aug 03 2011
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SABB Saudi Arabia PMI in July
New orders and employment grow solidly
PMI data signalled a sharp slowdown in the rate of expansion of Saudi Arabia's non-oil private sector economy at the start of Q3. Noticeably weaker rises were recorded in both output and new orders, while job creation also moderated. Reflecting this, the headline seasonally adjusted SABB HSBC Saudi Arabia PMI™ registered a 10-month low of 60.0 (down from 62.8 in June). Nevertheless, the PMI remained comfortably above the neutral mark of 50.0, suggesting that business conditions continued to improve at a marked pace.
KSA non-oil private sector companies recorded further growth of new business in July, which respondents linked to favourable market conditions, good demand and new product launches. However, the rate of expansion slowed noticeably from June's near-record high to a nine-month low. This was despite a faster increase in new export business. New work from abroad rose at an unprecedented rate in the latest survey period.
Unfinished business continued to accumulate during July. However, the rate of increase remained only marginal and much weaker than the average for the past year.
Buying activity increased at a much slower rate in July, reflecting an easing trend in new order growth. Input stocks continued to rise solidly.
· Output rises at slowest pace since February 2010
· Jobs growth continues to slow, but remains solid
· Input price inflation broadly stable in July
· Charges rise at slowest pace for five months
Panellists reported longer lead times in July for the first time in the survey history. Firms blamed greater demand for inputs, low manpower at suppliers and payment problems for delays. That said, the rate of deterioration was only slight.
Input price inflation was broadly stable in July, as a sharper rise in staff costs was outweighed by a slowdown in purchase price inflation. In relation to the series trend, the overall rate of increase was nonetheless substantial.
Companies took advantage of favourable demand conditions to pass through some of their increased input costs to customers in July. Charges rose solidly as a result, but at the slowest pace for five months.
© Press Release 2011
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