DUBAI (Reuters) – Saudi Arabia’s non-oil private sector expanded in December at the slowest rate since July, weighed down by slower output and new orders, a survey showed on Sunday.
The seasonally adjusted IHS Markit Saudi Arabia Purchasing Managers’ Index (PMI) fell to 56.9 in December, the lowest reading in five months, from 58.3 in November. But it stayed far above the 50.0 line indicating expansion.
The slip came as a result of slowed business activity, which at 58.1 was at its lowest since October 2018. Surveyed firms attributed this to increased competitiveness for new work and difficulty closing sales.
The new orders index for December stood at 64.2, only down a little from November’s 65.9 which was a more than four-year high.
Employment remained subdued, registering only 50.5 according to the survey.
The data “points to a short-term setback for the non-oil private sector,” said Tim Moore, Economics Associate Director at IHS Markit.
“However,” he added, “the survey continues to indicate a much stronger improvement in business conditions than at the same time during 2018, particularly in relation to new order books.”
Growth in the non-oil private sector is crucial for Crown Prince Mohammed bin Salman’s plans to diversify the economy and create jobs in Saudi Arabia, the world’s largest oil exporter.
On Tuesday, government data showed the economy had contracted by 0.46% in the third quarter, hit by oil output cuts, although non-oil output grew 4.33%.
(Reporting by Nafisa Eltahir; Editing by Hugh Lawson)