Saudi Arabia’s Purchasing Managers’ Index (PMI) edged lower again in February amid softer operating conditions, extending a decline that began after the index hit a more than decade-high last October.
The Riyad Bank Saudi Arabia PMI slipped to 56.1 in February from 56.3 in January, signalling a slight moderation in growth across the non-oil private sector.
Output growth slowed to a six-month low, with some businesses citing intensifying competition as a drag on expansion.
Naif Al-Ghaith, Chief Economist at Riyad Bank, said that although momentum has eased, the sector continues to expand, underpinned by seven consecutive months of rising overseas sales and stronger inflows of new orders.
Higher sales and a growing backlog of work prompted firms to increase hiring. However, tighter labour market conditions pushed wage costs up at the fastest pace on record, leading companies to raise their selling prices.
Order books continued to expand during the month, supported by improved customer spending.
Analysts noted that the ongoing Iran conflict could pose risks to growth, though business sentiment for the year ahead remains upbeat.
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