Figures released on Monday from Saudi Arabia and the United Arab Emirates showed that non-oil private sector growth is continuing.
Whilst Saudi Arabia recorded a seventh straight month of growth, the UAE grew in March at the fastest rate since July 2019.
Saudi Arabia Growth Continues But Slows
The seasonally adjusted IHS Markit Saudi Arabia Purchasing Managers’ Index (PMI) declined slightly to 53.3 in March from the 53.9 registered in February. Despite being a seventh straight month above the key 50 level which separates an economy in contraction and expansion, the rate is slowing.
The overall index has dropped from a high of 57.1 reached in January. This indicates the recovery from the COVID-19 pandemic has lost some steam. David Owen, economist at survey compiler IHS Markit said:
“The pandemic and associated restrictions continued to trim new business growth, according to respondents, contributing to a more downbeat outlook for business activity over the next 12 months,”
“This largely reflected doubts about clients’ willingness to spend as well as the short-term boost to the economy from the vaccine rollout, with some firms expecting market activity to remain subdued until the second half of the year.”
David Owen, economist at survey compiler IHS Markit
UAE PMI Hits 20-Month High
As its Mid-East counterpart grew at a steady rate, the United Arab Emirates’ non-oil private sector grew in March at the fastest rate since July 2019, bolstered by new business and a sharp increase in the construction sector.
The seasonally adjusted IHS Markit UAE Purchasing Managers’ Index (PMI), which covers manufacturing and services, increased to 52.6 in March from 50.6 in February. March’s figure was a 20-month high, indicating a solid upturn in business conditions despite still below the series average of 54.1.
David Owen, economist at survey compiler IHS Markit said:
“The PMI has also now been above the 50.0 no-change mark in each of the latest four months, signalling increased momentum in the economy’s recovery. Likewise, business confidence improved to an eight-month high, with vaccine optimism driving confidence in future activity,”
David Owen, economist at survey compiler IHS Markit
