DUBAI, Aug. 3 (Reuters) – Saudi Arabia’s non-oil private sector continued to expand in July but at a slower pace, according to a business survey, signaling that business conditions remain difficult as the economy continues to grow. largest Arab economy is recovering from coronavirus crisis.
Saudi Arabia’s seasonally adjusted IHS Markit Purchasing Managers Index (PMI) stood at 55.8 in July from 56.4 in June, due to weaker output growth, new orders and employment compared to the previous month.
“While Saudi Arabia’s PMI continued to show strong growth in the non-oil economy in July, our survey data on business capacity highlighted difficult economic conditions prevailing,” said David Owen, economist at IHS Markit.
Businesses continued to hire but at a slower pace, with the employment sub-index falling to 50.2 from 51.1 in June.
Expectations for future growth were at their lowest since April, contributing to lower staff increases.
Saudi Arabia, the world’s largest exporter of crude, was hit hard last year as weaker global demand for energy weighed on crude oil domestic product while the non-oil economy suffered from adverse effects. coronavirus restrictions.
But economic activity has picked up this year. The International Monetary Fund expects economic growth of 2.4% against a contraction of 4.1% last year.
Despite slowing for a second consecutive month, production remained strong in July, supported by growing demand and the easing of pandemic-related measures, according to the survey.
“The sustained increase in demand should help the economy approach full capacity in the second half of the year. However, a drop in business expectations to their lowest level since June 2020 has illustrated growing doubts about smooth running, ”said Owen. noted.
Reporting by Davide Barbuscia; Editing by Toby Chopra
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