It appears that the growth in Saudi Arabia's non-oil private sector remained steady in May, with a Purchasing Managers' Index (PMI) of 56.4, slightly down from 57 in April, according to official data. The Riyad Bank Saudi Arabia PMI report by S&P Global indicates that business activity in Saudi Arabia increased at a substantial rate in May, continuing a period of robust output growth in the non-oil economy.
The rise in business activity and new orders in May was supported by strong demand conditions, especially in domestic markets. Companies continued to increase their levels of employment in May, primarily due to higher workloads, offsetting the first decline in over two years in April.
The report also highlights robust inventory growth in May, following its record high in April, as companies prepared for strong sales performances in the future.
Additionally, efforts to diversify Saudi Arabia's economy are expected to strengthen non-oil GDP growth, with estimates indicating growth of over 3%.
Meanwhile, Egypt's PMI significantly increased in May to 49.6, marking the highest level since August 2021. Business activity decreased at a slower rate since July last year, while companies took on more staff due to growing confidence in sales improvement.
Business confidence towards the 12-month outlook also rose in May, with hopes of economic conditions strengthening in the coming months. This reflects a broader trend in the region, with Kuwait's PMI rising and Qatar's PMI also showing progress, indicating positive momentum in the non-oil sectors of these economies.
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