PMI data signaled a sharp slowdown in the rate of expansion of Saudi Arabia's nonoil private sector economy at the start of Q3. Noticeably weaker rises were recorded in both output and new orders, while job creation also moderated. Reflecting this, the headline seasonally adjusted SABB HSBC Saudi Arabia PMI registered a 10-month low of 60.0 (down from 62.8 in June). Nevertheless, the PMI remained comfortably above the neutral mark of 50.0, suggesting that business conditions continued to improve at a marked pace.Saudi nonoil private sector companies recorded further growth of new business in July, which respondents linked to favorable market conditions, good demand and new product launches. However, the rate of expansion slowed noticeably from June's near-record high to a nine-month low. This was despite a faster increase in new export business. New work from abroad rose at an unprecedented rate in the latest survey period.In line with a weaker trend in new order growth, output rose at a much slower pace during July. Nevertheless, activity continued to expand at a robust pace. Medium-sized firms registered a stronger increase in output than small or large companies.Unfinished business continued to accumulate during July. However, the rate of increase remained only marginal and much weaker than the average for the past year.To manage current workloads and company expansions, as well as to comply with the government's new Nitaqat system, firms recruited additional workers in July. Employment rose solidly, but at a milder rate than in the previous four months.Buying activity increased at a much slower rate in July, reflecting an easing trend in new order growth. Input stocks continued to rise solidly.
