05 April 2022
3 mins clock icon

Regional PMIs mixed in March

While the Saudi Arabia PMI strengthened in March, in Egypt it declined and in the UAE it was unchanged from February

By Daniel Richards


The UAE’s headline PMI was unchanged in March, coming in at 54.8. This is stronger than the series average and indicates a robust expansion in the non-oil private sector. In common with the headline figure, both output and new orders were little changed from the previous month, both solidly above the neutral level, with firms citing a firming recovery from the pandemic crisis. However, the competitive nature of the UAE’s non-oil private sector was highlighted by some firms attributing the growth in output to improved marketing, while others highlighted competitive pressures as holding back new orders.

This high level of competition is also evident in the prices charged by businesses in the UAE, as output prices contracted for the eighth month in a row. The pace of this contraction slowed, however, as input prices continued to rise to a 40-month high. Raw materials and energy costs kept input prices well above the series average, exacerbated by the war in Ukraine. Staff costs were unchanged from the previous month, but employment did tick up to a three-month high. Business confidence remained high but was modestly down on February as firms cited concerns about the potential disruption to business from the crisis in Eastern Europe.

Saudi Arabia

The Saudi Arabian non-oil private sector continued to expand at a robust rate in March, as the headline PMI rose to a four-month high of 56.8, up from 56.2 the previous month. The output subcomponent increased at the fastest pace since December 2017, while new orders expanded at a similarly strong pace to that seen in February as new export orders turned positive again. These had contracted over the previous two months, but firms noted an improvement in external demand in March. Businesses also remain confident with regards the next 12 months on the back of an improving economic backdrop, albeit modestly less so than in February.

Saudi Arabian businesses saw input prices tick up sharply in March, at the fastest pace since August 2020. Purchase prices were accountable for the bulk of this but there was also a modest uptick in staff costs which rose for the first time in eight months as employee wages rose. By contrast to the UAE, businesses in Saudi Arabia are passing their higher costs on to consumers more, and output prices also rose at the fastest pace since August 2020. 


According to the S&P Global PMI survey, Egypt’s non-oil private sector slowed sharply in March as the headline reading fell to a 21-month low of 46.5, down from 48.1 the previous month. The slowdown was broad based, driven by both the lingering fallout from the Covid-19 pandemic and its effect on supply lines, and also the Ukraine conflict. The output and new orders subcomponents came in at the lowest level since June 2020, as firms cited diminished consumer demand as the outlook deteriorated. Export orders declined at a slower pace, perhaps supported by the depreciation in the pound.

After the pace of gains pared modestly last month, input price rises accelerated again in March as businesses noted the inflationary effects of the war in Ukraine, while the depreciation of the pound added new pressures. Staff costs fell though as firms looked to mitigate the impact of this on their margins, and employment fell for the fifth month running. Nevertheless, the higher input prices are being passed on to consumers as the output price index ticked up again in March, which will keep pressure on the CBE for more rate rises after it made its first hike last month.

Business confidence has fallen to a series low, meaning that firms are the least optimistic for the next 12 months that they have been in a decade. Firms cited the rising inflation and the Ukraine conflict, and the negative effect this was likely to have on the economy. While most respondents remained positive, at 52.5 the measure was very close to the neutral 50.0 level, and the diminished optimism was also reflected in firms’ purchasing which contracted at the fastest pace since the peak of the pandemic crisis in April 2020. Inventories contracted sharply as businesses ran down supplies rather than purchasing in the market as prices rose.

Written By

Daniel Richards Senior Economist

There was an error during your feedback!

Your feedback is valuable to us and will help us improve.

Daniel Richards

Related Articles

Subscribe to our newsletter and stay updated on the markets

There was an error during your newsletter subscription!

Please try again to stay updated with all the latest financial news and valuable insights.

Thank you for newsletter subscription!

To stay updated with all the latest financial news and valuable insights.