Saudi, UAE business activity growth slows
Dubai, June 3, 2014
Non-oil business activity growth slowed both in Saudi Arabia and the UAE, two leading economies of the GCC, in May as new orders cooled, surveys showed.
In Saudi Arabia, activity rose at their most sluggish pace since September 2011, the SABB HSBC Saudi Arabia survey said.
The seasonally adjusted SABB HSBC Saudi Arabia Purchasing Managers Index slipped to 57.0 points last month from 58.5 points in April, though it remained well above the 50-point mark separating expansion from contraction.
While output growth continued to accelerate, to 62.3 points in May from 61.0 points in April, growth in new orders dropped sharply to 63.6 points from 67.6 points. The rise in export orders also slowed considerably, to 54.6 points.
Saudi companies surveyed for the poll said they hired more staff in May, albeit at a marginal rate of 50.9 points. The rise in average input costs slowed to 51.7 points, the lowest level registered since the survey was launched in August 2009; output prices actually fell, for the first time since August 2013.
In the UAE, growth of business activity slowed from a record high in April as output expansion and new orders cooled slightly, the HSBC UAE Purchasing Managers' Index showed.
The index, which measures the performance of the manufacturing and services sectors, fell to a seasonally adjusted 57.3 points in May from 58.3 in April, the survey of 400 private sector firms showed.
It remained above the 50-point mark that separates growth from contraction.
"Output and new orders both continue to grow well, and the labour market is in rude health," said Simon Williams, chief economist for the Middle East and North Africa at HSBC.
"These would be good numbers at the best of times. Given the weakness affecting so many other emerging markets, the data is better still."
Output growth by UAE firms weakened to 61.0 points in May from 62.4 points in April, which was the strongest rate since the series started in August 2009. New orders growth eased to a nine-month low of 64.4 points.
Employment creation across the UAE's non-oil private sector edged down to 54.0 points from April's 54.7 points, which was the quickest pace since late 2009.
Suggesting some pressure on corporate profit margins, output prices fell deeper into negative territory, with the index hitting 49.0 points in May, while the rate of input price inflation edged up to 53.6 points. - Reuters