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PMIs: UAE and KSA both rise in April

Daniel Richards - MENA Economist
Published Date: 03 May 2023



The S&P Global non-oil private sector PMI for the UAE rose to 56.6 in April, up from 55.9 the previous month. This marked the strongest level for the survey since Q3 last year and was only modestly lower than the recent peak of 56.7 recorded in August as the local economy shrugs off some of the pressures that are driving a slowdown elsewhere in the world. Output also grew at the highest levels since last August and over a quarter of respondents noting a m/m expansion.

UAE PMI and subcomponents

Source: S&P Global, Emirates NBD Research

It has been primarily the domestic economy that appears to be driving the growth, as new export orders were flat compared to March, after expanding only slightly last month and shrinking over December to February. By contrast, total new orders accelerated at the fastest pace since October, with around 30% of businesses reporting an increase, while only 7% noted that their orders had declined in April. Firms appear to be supporting this domestic demand through ongoing discounting, and output prices declined for the 12th month running, and at the sharpest rate since September 2020. There was somewhat more room to do this as input price pressures moderated in April, with purchase costs rising at a slightly slower pace than in March, with what gains there were largely attributed to raw materials.

Staff costs also rose, for the third month in a row, and at the fastest pace since July last year, with businesses noting that increased hiring was tightening the labour market. Employment was positive for the 12th consecutive month, albeit at a softer pace than in March. Business optimism was strong against this positive backdrop, rising to the highest level since September.

Saudi Arabia

The Riyad Bank PMI survey for Saudi Arabia continues to show an economy that is expanding strongly, as it rose to 59.6 in April, up from 58.7 in March. This takes the headline reading almost back to the eight-and-a-half-year high of 59.8 recorded in February and reaffirms our expectation of strong non-oil growth this year – we forecast 4.8%.

KSA PMI and subcomponents

Source: Riyad Bank, Emirates NBD Research

Output expanded strongly in April on the back of strong customer demand and with new orders continuing to grow at an elevated pace, the expectation is that this will remain robust through the rest of the year. New orders rose at the fastest pace since September 2014 with over 40% of respondents citing an increase, while only 2% saw a decline. As with the UAE, these new orders are being driven by domestic demand, with tourism and infrastructure projects in particular driving growth. New export orders were down on the previous month, marking a steep drop in the index subcomponent after a robust expansion in March.

Firms in Saudi Arabia appear to have greater pricing power than their counterparts in the UAE, and output prices rose at a faster pace last month even as input prices rose more slowly, at a three-month low. Staff costs rose for the sixth month running as while purchase prices also rose, although at a slightly softer pace than seen in March. Headcount grew for the 13th consecutive month as firms looked to clear backlogs of work amid high demand.

Despite the high levels of activity and new orders, business optimism in Saudi Arabia fell in April compared with March and remains below the long-run average for the series. This potentially reflects the deteriorating global outlook and the drop in new export orders.


Egypt’s S&P Global PMI reading rose in April to a six-month high of 47.3, up from 46.7 in March. This is the strongest reading since October last year, when Egypt entered into its new IMF programme, but is still still firmly in contractionary territory as Egypt contends with financial and economic pressures. Output fell at the slowest pace since October but was nevertheless still fairly acute, with businesses across a range of sectors noting a decline. Looking ahead, new orders also softened the pace of their decline, but were still below the neutral level, although there was an improvement noted from construction firms. New export orders also declined, for the fourth month running, as weaker conditions in export markets mean that even the weaker pound has not been enough to boost demand.

Prices pressures eased in April, rising at the softest pace since April last year. The slowdown was across both purchase prices, which rose at the slowest rate in a year, and staff costs, where the increase in wages was only marginal compared to March. Firms were able to pass these costs on through raising their output prices, but this was at the slowest pace since August last year and some firms were discounting in order to support demand.

Amidst the pressures on Egyptian businesses, business optimism fell to a series low in April, with expectations that inflation will continue to dampen demand.