RIYADH: Saudi Arabia’s Purchasing Managers’ Index remained unchanged from April at 55.7, according to a press release from S&P Global.
The headline index figure signaled a marked expansion in activity and new orders in Saudi non-oil businesses, with lingering concerns that inflation could obstruct demand in global and domestic markets.
New business rose at a slightly quicker pace than in April, as demand started to pick up with a recovering post-pandemic economy, according to the press release.
“The continued strength of the domestic non-oil economy encouraged firms to pass through higher input costs to their customers in May, with the latest PMI data indicating another solid increase in selling prices due to greater fuel, material and transport costs,” it added, citing David Owen, an economist at the firm.
The increase in prices was also accompanied by a rise in input costs at the second quickest pace in a year and a half — aside from the uptick in March related to the aftermath of Russia’s invasion of Ukraine.
This is triggered by the global inflationary measures, which was reflected by higher fuel, material and freight prices.
Constrained supply posed another limitation to supplier performance improvement, as backlogs of work at non-oil companies during May increased, marking the first incomplete business since COVID-19 pandemic began.
As such, employment numbers also showed a slight increase for the second straight month, according to the report.
“Reflecting these risks, the outlook for future activity remained notably weak, with just 11 percent of respondents signaling expectations of a rise in output by May 2023, less than half the survey’s long-run trend,” Owen pointed out.