Saudi Arabia’s non-oil private sector stabilised in July after four months of contraction, a survey showed on Wednesday, suggesting the worst of the disruption caused by the coronavirus pandemic may be over.
The seasonally adjusted IHS Markit Saudi Arabia Purchasing Managers’ Index (PMI) rose to 50.0 from 47.7 in June, settling at the mark that separates growth from contraction.
Indicators for output, new orders and jobs all rose in July but fell short of the 50.0 mark, meaning that the PMI would have remained below 50.0 were it not for a solid rise in stocks of purchases and longer suppliers’ delivery times.
The non-oil private sector is at the centre of de facto ruler Crown Prince Mohammed bin Salman’s reform plans aimed at diversifying the kingdom’s economy away from oil.
The world’s biggest oil producer had the region’s highest coronavirus figures as of Aug. 3, with over 280,000 cases and nearly 3,000 deaths.
While many restrictions have been lifted, international flights remain shut and the Haj pilgrimage, a major source of income for the government which in past years would draw some 3 million pilgrims, was scaled back dramatically.
The new export orders sub-index of the survey contracted for the fifth straight month, as international demand remained weak, while employment also fell for the fifth consecutive month.
Sentiment was the strongest since February, with almost a quarter of firms expecting growth over the coming year, the report said.