Saudi non-oil private sector growth slows in February -PMI

The growth of Saudi Arabia's non-oil private sector slowed in February as business activity and new orders both decelerated, a survey showed on Wednesday, though it kept up a six-month expansionary streak.

The seasonally adjusted IHS Markit Saudi Arabia Purchasing Managers' Index (PMI) fell to 53.9 in February from 57.1 in January, the headline index's lowest reading since October. The 50 mark separates expansion from contraction.
The overall index's expansion was driven by growth in the output, new orders and stocks of purchases sub-indexes, although they all grew at a weaker pace than in January.

"Nevertheless, the sector remained broadly on the right track, with new business inflows and export sales continuing to rise whilst firms also built inventories in anticipation of stronger future growth," said David Owen, economist at survey compiler IHS Markit.

Output slowed to 56.9 in February from 61.2 in January, which was a 15-month high.

Employment continued to lag the non-oil sector's recovery from the impact of the COVID-19 pandemic, as companies have yet to see additional pressure on business capacity. The sub-index recorded a contraction for the third consecutive month and the eleventh month in the past year.

"That said, barring the slight increase in employment last November, the rate of job shedding was the softest recorded for 10 months," Owen said.

Expectations for the next year weakened in February, with sentiment falling to its lowest since October as firms expected output to be subdued in the near term despite widespread confidence linked to the rollout of COVID-19 vaccines.

Saudi Arabia was recently overtaken by the United Arab Emirates as the Gulf Arab country with the highest number of recorded COVID-19 cases, according to Reuters data based on government statistics.

Saudi Arabia recorded 317 new cases on March 1 versus the UAE's 2,526, the data showed.

But Saudi Arabia lags in vaccinations as it has administered enough doses to inoculate around 1.1% of its roughly 34 million population, while the UAE has administered enough doses to vaccinate about 30.8% of its population of nearly 10 million, one of the highest rates in the world.