Business activity in the non-oil private sector of the Arab world’s two biggest economies continued to expand in May as rising confidence amid roll out out of Covid-19 vaccination at pace boosted new orders and domestic demand.
The IHS Markit Saudi Arabia Purchasing Managers’ Index rose for the second month in a row to 56.4 in May from 55.2 in April. A reading above the 50-mark is an indicator of economic expansion while anything below points to a contraction.
The reading indicated a robust improvement in business conditions that was the fastest recorded since January, according to the survey.
A rise in the output Index propelled the expansion of the kingdom’s non-oil economy in May. The latest expansion in output was the quickest since December 2017.
“Saudi Arabia’s non-oil sector continued to enjoy a strong recovery in May, led by a sharp rise in output,” David Owen, Economist at IHS Markit, said. “Firms often cited growth in new business and a notable pick up in export sales.”
The IHS Markit UAE PMI posted 52.3 in May, to signal a moderate improvement in business conditions and the sixth in as many months. The index was down slightly from 52.7 in April.
The latest data pointed to solid expansions in output and new business in May. New orders rose with improving domestic sales on the back of rising confidence surrounding the Covid-19 pandemic.