Saudi Nov business growth at 1-year low
Riyadh, December 3, 2012
Growth in business activity in Saudi Arabia dived to a one-year low during a November marked by extended public holidays but it remained well above the 50-point mark separating expansion from contraction, a survey showed on Monday.
The SABB HSBC Saudi Arabia Purchasing Managers' Index fell 2.8 points to 57 on a seasonally adjusted basis in November, its lowest level since October 2011.
The fall in the index was the biggest in the three years the survey of over 400 private companies has been running, but Saudi business growth remains strong by international standards.
The world's top oil exporter has enjoyed high energy prices in recent years and boosted its economy with strong government spending, a trend economists expect to continue.
More than 40 per cent of the panelists surveyed indicated an increase in the level of orders received and linked this to good market conditions. The rate of growth was, however, the lowest since September 2011.
The level of new export orders received at non-oil producing firms in Saudi continued to rise during November, it stated.
In November, Saudi Arabia hosted the annual haj pilgrimage and marked the Eid al-Adha holiday, entailing a two-week government holiday and a break of about a week for many private companies.
Business managers also reported employment rose for the fourteenth consecutive month in November, and at a higher rate than in October.
Output growth slowed 4.4 points to 60.2, while new orders fell 5.2 points to 64.0, with both measures weakest since September last year.
An HSBC research note said the November readings appeared to run against other economic indicators showing continued strong Saudi economic expansion.
"Employment, for example, gained speed in November, while purchases for stocks were unchanged and delivery times lengthened," it said, adding that point of sales transactions and credit growth were both strong.
Employment levels rose for the fourteenth successive month in November, and at a higher rate than in the previous month. Where an expansion of workforce numbers was reported, respondents linked this to increased business requirements, said the report.
Companies also increased salaries in November and partly attributed this to higher living costs, the report stated.
However, the SABB report pointed out that the level of outstanding business decreased for the first time in four months. The clearing up of pending orders was often mentioned as the primary factor highlighted by firms that reported lower levels of outstanding business.-Reuters and TradeArabia News Service