DUBAI, May 3 (Reuters) - Saudi Arabia's non-oil business
activity accelerated sharply in April, a monthly survey showed,
boosted by an increase in new business fuelled primarily by
domestic demand.
The seasonally adjusted Riyad Bank Saudi Arabia Purchasing
Managers' Index jumped to 59.6 in April from 58.7 in March,
firmly over the 50 mark separating growth from contraction, and
only slightly below the eight-year high recorded in February.
The New Orders sub-index surged to 69.1 in April from 66.4
the previous month, the highest pace of growth in more than
eight and a half years.
"We have witnessed rising tourism numbers and higher
consumer spending, alongside new business opportunities related
to major infrastructure projects," said Naif Al-Ghaith, chief
economist at Riyad Bank.
"Moreover, long-term business expansion plans have made the
rate of job creation slightly stronger than seen on average in
the first quarter of 2023."
The Output sub index continued to grow in April, up slightly
to 64.4 in April from 64.2 the previous month but the latest
increase means the non oil sector has been growing uninterrupted
for a 32 month period, last dipping below 50 in August 2020.
Economic growth in Saudi Arabia, the world's top oil
exporter, is expected to slow sharply in 2023 on the back of
lower expected oil prices and production.
A recent Reuters poll of 16 economists forecast growth of
3.2% this year, less than half 2022's decade-high pace of 8.7%. However, the government expects non-oil sector growth of
around 6% over the next three to five years, boosted by
investments in huge infrastructure projects, a push for
privatisation and job creation for citizens.
While the latest survey showed optimism among non oil sector
businesses over the near-term growth outlook, confidence
remained weaker than the pre-pandemic level.
(Reporting by Rachna Uppal; Editing by Toby Chopra)
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