Saudi Business Activity Ends Monthslong Funk But Jobs Lag

(Bloomberg) -- Business conditions in Saudi Arabia improved for the first time since September as the effects of the pandemic ebbed away despite sluggish gains in employment and some labor shortages.

A Purchasing Managers' Index compiled by IHS Markit rose to 56.2 in February from 53.2 during the previous month. The gain was led by a surge in new business growth, better sentiment and customer demand.

“The omicron wave on the non-oil economy was only mild,” said David Owen, economist at IHS Markit. “Signs of improving market conditions meant that business optimism was at its highest since January 2021, as firms expect demand growth to remain robust and the impact of the pandemic to subside.”

Saudi Arabia saw only a mild uptick in employment and some data suggested staff shortages linked to Covid-19
There was a rebound in sales, attributed to more customer demand and lower virus cases
New export orders fell for the second straight month
Companies looked to capitalize by increasing their input purchases at the fastest pace in about three years
Business confidence picked increased to the highest level since January 2021

In the neighboring United Arab Emirates, the PMI gauge rose slightly as companies were able to speed up deliveries, signaling improvements in local supply chains. The index was at 54.8 in February, compared with 54.1 during the first month of the year, remaining above the 50 mark separating growth from contraction.

In Egypt, business confidence fell to its lowest level in the series history, due to concerns about economic conditions and the impact of high prices. The overall index inched up slightly to 48.1 in February from 47.9 a month earlier, but it was the fifteenth straight monthly contraction as price pressures weighed on business confidence and consumer spending.