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Slowest improvement in business conditions in Saudi Arabia

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Christian Fernsby ▼ | February 5, 2020
January data signalled an overall improvement in business conditions across Saudi Arabia's non oil private sector, but the latest upturn was the slowest for just over one year.
Saudi Arabia workers
Business in Saudi Arabia   This was signalled by a decline in the headline seasonally adjusted PMI
This was signalled by a decline in the headline seasonally adjusted IHS Markit Saudi Arabia Purchasing Managers’ Index (PMI) to 54.9 in January, from 56.9 in December.

Topics: Saudi Arabia

Growth momentum has now moderated in each of the past two months, with the latest slowdown largely reflecting a weaker contribution from the new orders component of the PMI.

Survey respondents noted that strong competition and more cautious spending patterns among customers had held back new business growth at the start of 2020.

Moreover, export sales dipped slightly across the non oil private sector, reflecting relatively subdued business conditions in key overseas markets.

Business activity increased in January, but the rate of expansion was similar to the 14 month low seen during December.

A number of firms commented on a lack of pressure on business capacity amid softer overall new order growth at the start of the year.

As a result, employment numbers rose only slightly, with the pace of job creation the weakest since August 2019.

Meanwhile, input buying increased at the slowest rate for 12 months in January as non oil companies adjusted to softer new business growth.

Mirroring the trend for purchasing, latest data also revealed a weaker degree of inventory accumulation.

The latest rise in stocks of inputs was the least marked since August 2019. â–