Saudi non-oil business activity surges in April, boosted by new orders-PMI

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)