Arab News, Tuesday, Jan 04, 2022 | Jamada Al-Aakhirah 01, 1443
Saudi private sector growth drops to 9-month low on omicron concerns: IHS Markit
Saudi Arabia:
Fuelled by omicron worries, the growth of the
Saudi private non-oil sector experienced a nine-month low as demand and
confidence weakened in December, according to IHS Markit.
The Kingdom’s Purchasing Managers’ Index dropped
considerably in December, falling by three points to 53.9 in December, the
latest survey release showed. However, since it still crossed the 50-threshold,
the reading still indicated improvement in conditions.
The drop in PMI was attributed to a sharp decline
in new orders which, in turn, softened both backlogs and employment, with output
expanding at the lowest rate since August.
Moreover, the firms’ outlook for the next year
slumped to an 18-month low. Only 8 percent of surveyed firms thought that output
will rise in 2022, despite some optimism concerning potentially higher demand
and new product releases, the London-based firm added.
"The Saudi Arabia PMI ended the year on a dull
note, as it registered its lowest reading for nine months due to concerns about
the global spread of the Omicron variant leading to a marked slowdown in new
business growth,” David Owen, economist at IHS Markit, said
In addition, costlier raw materials and
transportation were a result of increasing input prices, as the inflation rate
reached its highest level since June. This induced firms to raise their selling
prices, yet there were some reports that healthy competition prompted some
businesses to make discounts.