August PMI survey data showed a strong expansion in Saudi Arabia's non-oil-producing economy, but with growth slowing from July as output expanded at the weakest pace in ten months, and new orders also rose to a lesser extent due to a weaker recovery in export demand.<IHS Markit, which produces the PMI, said in its report on Sunday that Saudi companies continued to report high levels of excess capacity and weak expectations for future production and as a result employment growth remained subdued while inventories rose at the slowest pace since last October.

At the same time, production prices rose at their strongest rate in a year despite a modest increase in input costs.

The seasonally adjusted Purchasing Managers' Index (PMI) in Saudi Arabia registered 54.The reading indicated a strong improvement in conditions in the non-oil private sector, albeit the slowest in 5 months.

The 1.7-point drop in the PMI was driven by the production index which fell sharply to its lowest level since October 2020, yet the index still signaled a strong rise in non-oil producing activity, a rise that respondents generally linked to demands for improvements and easing of travel procedures.

New business continued to grow sharply during the month, although the rate of growth was down from July, as was production, due in part to a slight increase in export sales, and the emergence of COVID-19 cases in other parts of the world weakened the recovery in foreign demand.