Business activity in the non-oil private sector economies of Saudi Arabia and the UAE continued to strengthen in June, with output and new orders increasing rapidly.
The reading for Saudi Arabia, the Arab world's largest economy, on the Riyad Bank purchasing managers' index rose to 59.6 in June, from 58.5 in May.
This was well above the neutral 50-point mark that separates growth from contraction, as output in the kingdom rose at the steepest rate since March 2015, while sales growth was the strongest in about nine years.
Business activity in the UAE’s non-oil private sector also strengthened as new order growth hit a four-year high in June, marking the most pronounced improvement since June 2019.
The health of the non-oil private sector has now improved in each of the past 31 survey periods. The seasonally adjusted S&P Global purchasing managers’ index reading of the Arab world's second-largest economy climbed to 56.9 in June, from 55.5 in May.
In response to an uptick in both output and new orders, companies in Saudi Arabia increased their purchasing activity at the fastest pace in the PMI survey's history to meet higher business requirements and bolster stock, with the rate of inventory accumulation hitting a ten-month high.
Meanwhile in the UAE, new business improved rapidly in June, with the rate of expansion hitting a four-year high, largely supported by an increase in new orders from abroad that was fuelled by stronger customer demand.
Non-oil growth in the UAE is forecast at 5.0 per cent this year, according to Emirates NBD.
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