Tuesday 18 June 2024

Saudi, UAE non-oil business activity up

Riyadh, October 3, 2012


Growth of business activity in Saudi Arabia's non-oil private sector rose to a four-month high in September because of an increase in new orders, while new orders shot up to a 15-month high in the UAE, surveys showed.
The SABB HSBC Saudi Arabia Purchasing Managers' Index, which measures activity in the manufacturing and services sectors, rose to 60.3 points in September against 58.3 points in August. The seasonally adjusted index remained well above the 50-point mark separating growth from contraction.
The HSBC UAE Purchasing Managers' Index rose to 53.8 points last month from 53.3 in August.
"It's a positive reading that suggests the UAE is one of the few economies in the world where private sector growth is accelerating rather than losing pace," said Simon Williams, chief economist for the Middle East at HSBC.
New order growth in Saudi Arabia increased in September to 70.2 from 68.7. "Over 55 percent of the survey panel signalled an increase in total new business, reflecting reports of improved inflows from both domestic and export clients," the survey said.
The index for new export orders gained sharply to a 14-month high. Employment rose to a five-month high of 55.3 from 53.00, which was its lowest level in five months.
"Improved operating conditions and rising levels of outstanding business encouraged companies to increase employment. Payroll numbers rose for the twelfth consecutive month, with the pace of jobs growth the sharpest since April," the survey said.
Overall input price growth was strong while the output price index was only slightly above 50.0, however, suggesting the possibility of profit margins at some firms being squeezed.
Analysts predicted, in a Reuters poll conducted in September, that Saudi Arabia's gross domestic product would expand 5.3 percent this year, after a revised 7.1 percent last year. 
UAE firms saw output growth rise to 54.2 points in September from 53.8 in August.
New orders jumped to 60.7 points, the highest level since June 2011, though growth in new export orders edged up only slightly to 54.3 points, the survey also showed.
"I'm still concerned by the UAE's reliance on export demand, and by the rate of employment growth which is still disappointingly slow," Williams said.
"But for now the economy is showing resilience and with new orders strengthening, there's good reason to expect the UAE to maintain momentum into the year-end."
Employment growth across the UAE's non-oil private sector remained modest at 52.1 points in September, improving slightly from a four-month low of 52.0 in August.
Output price growth rebounded to marginally above the 50.0 mark in September, while growth in input prices moderated to 54.6 from 55.2.
Consumer price inflation in the UAE, the world's No. 3 oil exporter, climbed to a one-year high of 0.95 percent on an annual basis in August, according to government data.
In June, Minister of Economy Sultan bin Saeed al-Mansouri cut his forecast for the country's gross domestic product growth this year. He predicted expansion of around 3 percent, down from 4.2 percent in 2011, because of global weakness.
Analysts polled by Reuters in September forecast the Opec member's GDP would expand by 3.2 percent in 2012. - Reuters

Tags: UAE | Saudi | non-oil | Orders | Business Activity |

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