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HIGHER OUTPUT SEEN

Expansion in output boosts index.

Saudi, UAE non-oil growth edge up

RIYADH, January 6, 2015

Growth in Saudi Arabia's non-oil private sector accelerated slightly in December, driven by an expansion in output, though it remained weaker than it was in most of 2014, a survey of businesses showed on Tuesday.

Meanwhile, business activity growth in the UAE's non-oil private sector also edged up in December as output rose strongly, the seasonally adjusted SABB HSBC Purchasing Managers' Index showed.

The Saudi index rose to 57.9 points in December from 57.6 in the previous month, on a scale where 50 points separates expansion from contraction.

Growth during 2014 was slower only in March, May and November. However, there was no clear sign in the PMI data of any major impact on private sector activity from the plunge of global oil prices over the last six months.

Output growth accelerated in December to 63.3 points after it dipped sharply in November to 60.3 points. Employment growth accelerated slightly, to 53.0 points.

However, the rate of growth in new orders slowed to 63.7 points from 64.7 points a month earlier.

Input price inflation remained steady at 53.8 points, while inflation in output prices slowed to 50.2 points.

In the UAE, the index, which measures the manufacturing and services sector, was 58.4 points last month against 58.3 in November.

Dubai is a business centre for the Gulf region, but the PMI data did not show any significant impact from the plunge of global oil prices over the past six months.

"We expect lower oil prices to weigh on the economy into 2015, but for now demand is holding up well. That new orders as well as output have remained strong is particularly encouraging," said Simon Williams, chief economist for the Middle East at HSBC.

The measure of output growth climbed to 65.0 points in December from 62.8 in November, while new orders were at 65.4 points against 65.5. Employment growth slowed slightly but remained well into positive territory.

Input price inflation rose to 54.2 points from 52.3, while output price inflation dropped to 50.2 from 51.2. - Reuters




Tags: UAE | Saudi | growth | Output |

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