(Bloomberg) — A measure of activity in Saudi Arabia’s non-oil private sector dropped in July for the first time this year, hitting a five-month low in a sign that economic growth was losing momentum at the start of the third quarter.
The IHS Markit Purchasing Managers’ Index fell to 56.6 after reaching a 19-month high of 57.4 in June. Export orders rose at the quickest pace since February 2017, but there was only a marginal increase in employment, and businesses surveyed reported lower optimism over future output.
“Saudi Arabia’s non-oil private sector started the second half of the year growing at a healthy rate,” Phil Smith, principal economist at IHS Markit, said in the report. “However, the survey’s indicators for output, new orders and future expectations are all signaling some loss of momentum compared with the second quarter.”
The kingdom has struggled to get its economy back on track since it contracted 0.7% in 2017, an after-effect of the oil price rout and austerity measures that hit businesses hard. Second-quarter budget data showed that a long-promised injection of government cash was finally materializing as officials try to boost growth. Gross domestic product is expected to grow 1.7% this year, according to data compiled by Bloomberg.