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Operating conditions in Saudi Arabia’s non-oil economy in February improved at their fastest pace in three months despite concerns about the Omicron coronavirus variant, as business confidence and customer demand picked up, according to a business survey.
Cost inflationary pressures in the kingdom also eased, while expectations for future output jumped to their highest level since the start of 2021.
The IHS Markit Saudi Arabia Purchasing Managers’ Index (PMI) stood at 56.2 in February, up from 53.2 in the previous month, marking the first uplift in the index since September 2021. The latest reading indicated that the rate of growth of operating conditions in the kingdom was the fastest in three months.
The improvement was driven by a surge in new business growth after an Omicron-induced slowdown in the beginning of the year. Coronavirus cases in Saudi Arabia also began to fall in February, while overall sales picked up at the quickest rate since last November, despite a further slight fall in export demand, according to David Owen, economist at IHS Markit.
“The latest PMI figures confirmed that the impact of the Omicron wave on the non-oil economy was only mild. Following two months of relatively soft, but still positive growth, momentum rebounded strongly in February as cases began to fall,” Owen said.
Supply side conditions were also relatively strong in February, with businesses saying that vendors were able to deliver more quickly. This resulted in the strongest improvement in supplier performance since October 2019, IHS Markit said.
(Reporting by Cleofe Maceda; editing by Seban Scaria)
