Saudi private sector continues its momentum, but employment retreats – PMI

DUBAI, April 7 (Reuters) – Saudi Arabia's non-oil private sector continued to grow in March, while employment fell for the first time in five years, a monthly business survey revealed Sunday.

The seasonally adjusted seasonally adjusted Saudi Arabia purchasing managers index, Saudi Arabia, reached 56.8 in March, compared to 56.6 in February. A value greater than 50 indicates an expansion and less than this contraction.

The Saudi private sector experienced difficulties last year due to the rise in the price of gasoline, the introduction of a 5% value – added tax, and the addition of oil and gas. 39, increased recruitment fees for foreign workers.

But private sector growth has accelerated this year. It reached its highest level in 13 months in January and continued to gain ground – albeit marginally – in February and March.

The improvement in March was driven by the continued rise in new business, the strongest since April 2015, the PMI revealed.

The new orders sub-index reached 65.5 in March, its highest level in almost four years, while the production subindex reached its highest level in 59 months at 59.6 in up slightly from 59.2 in January.

But "the rebound in new orders and corporate output over the last few months has not fueled job growth as the private sector only shrank for the third time in its history last month," it said. Khatija Haque, head of research in the MENA region at Emirates NBD.

The slight decline in the employment sub-index, which stood at 49.8, marked the end of a five-year period of continued job creation.

"It also seems that companies have very limited pricing power, with selling prices decreasing (albeit marginally) for the fifth consecutive month," Haque said.

(Report by Nafisa Eltahir, edited by Catherine Evans)