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18 May 2015
RIYADH: Dun & Bradstreet South Asia Middle East Ltd. (D&B) in association with the National Commercial Bank (NCB) released the D&B Business Optimism Index (BOI) survey for Saudi Arabia for Q2, 2015. The BOI survey highlights lower optimism levels of both the hydrocarbon and non-hydrocarbon sectors in the Kingdom.
OPEC's decision to maintain its output level last year has played a part in the most recent oil price slump, as the Kingdom insisted on retaining its market share against competing sources of crude.
In Q4, 2014, Saudi Arabia produced 9.64 million bpd of crude, and maintained this level in the beginning of 2015, producing 9.68 million bpd in January 2015 and 9.64 million bpd in February 2015. The Kingdom is ramping up the number of machines drilling for oil and gas despite the sharp fall in the price of crude so as to preserve its spare capacity.
Sharihan Al-Manzalawi, NCB economist, said: "The continued volatility in oil markets since the beginning of the year has weighed negatively on the optimism in both the hydrocarbon and non-hydrocarbon sectors of the second quarter of 2015. Accordingly, the hydrocarbon's BOI dropped to 13 points, its lowest level since Q2, 2009. Meanwhile, the non-hydrocarbon's BOI declined modestly to 43 points as the government counter-cyclical fiscal policy, supported by its huge reserves, apparently, offset the expected negative impacts due to the sharp fall in oil prices."
The outlook for Saudi Arabia' hydrocarbon sector for Q1, 2015 has dropped to the lowest level since the second quarter of 2009. The composite BOI stands at 13 in Q2, 2015, down from 16 in Q1, 2015 and 49 in Q2 2014. The primary reason for this decline is the weak forecast for selling prices.
The current survey shows that the outlook of the non-hydrocarbon sector has moderated only marginally compared to the last quarter as well as the same quarter a year ago.
The composite BOI for the finance, real estate and business services sector remains at the same level as a year ago at 48, whereas the index has modestly declined by 4 points on a q-o-q basis.
The manufacturing sector's outlook for Q2 2015 is modestly lower than that observed in the previous quarter and in Q2 2014 mainly due to a much weaker forecast for selling prices.
The composite BOI for the transport sector has dropped to a series low of 32 for Q2, 2015.
Large companies are more bullish than the SMEs about the second quarter with composite BOIs of 47 and 38 respectively.
Sentiments with reference to the business environment in the hydrocarbon sector are cautious.
There is a slight improvement in the proportion of hydrocarbon sector firms intending to invest in business expansion plans.
Prashant Kumar, associate director, Dun and Bradstreet South Asia Middle East Ltd., said: "Sentiments among Saudi Arabia's business community in the hydrocarbon and non-hydrocarbon sectors have moderated as the BOIs have slipped this quarter."
RIYADH: Dun & Bradstreet South Asia Middle East Ltd. (D&B) in association with the National Commercial Bank (NCB) released the D&B Business Optimism Index (BOI) survey for Saudi Arabia for Q2, 2015. The BOI survey highlights lower optimism levels of both the hydrocarbon and non-hydrocarbon sectors in the Kingdom.
OPEC's decision to maintain its output level last year has played a part in the most recent oil price slump, as the Kingdom insisted on retaining its market share against competing sources of crude.
In Q4, 2014, Saudi Arabia produced 9.64 million bpd of crude, and maintained this level in the beginning of 2015, producing 9.68 million bpd in January 2015 and 9.64 million bpd in February 2015. The Kingdom is ramping up the number of machines drilling for oil and gas despite the sharp fall in the price of crude so as to preserve its spare capacity.
Sharihan Al-Manzalawi, NCB economist, said: "The continued volatility in oil markets since the beginning of the year has weighed negatively on the optimism in both the hydrocarbon and non-hydrocarbon sectors of the second quarter of 2015. Accordingly, the hydrocarbon's BOI dropped to 13 points, its lowest level since Q2, 2009. Meanwhile, the non-hydrocarbon's BOI declined modestly to 43 points as the government counter-cyclical fiscal policy, supported by its huge reserves, apparently, offset the expected negative impacts due to the sharp fall in oil prices."
The outlook for Saudi Arabia' hydrocarbon sector for Q1, 2015 has dropped to the lowest level since the second quarter of 2009. The composite BOI stands at 13 in Q2, 2015, down from 16 in Q1, 2015 and 49 in Q2 2014. The primary reason for this decline is the weak forecast for selling prices.
The current survey shows that the outlook of the non-hydrocarbon sector has moderated only marginally compared to the last quarter as well as the same quarter a year ago.
The composite BOI for the finance, real estate and business services sector remains at the same level as a year ago at 48, whereas the index has modestly declined by 4 points on a q-o-q basis.
The manufacturing sector's outlook for Q2 2015 is modestly lower than that observed in the previous quarter and in Q2 2014 mainly due to a much weaker forecast for selling prices.
The composite BOI for the transport sector has dropped to a series low of 32 for Q2, 2015.
Large companies are more bullish than the SMEs about the second quarter with composite BOIs of 47 and 38 respectively.
Sentiments with reference to the business environment in the hydrocarbon sector are cautious.
There is a slight improvement in the proportion of hydrocarbon sector firms intending to invest in business expansion plans.
Prashant Kumar, associate director, Dun and Bradstreet South Asia Middle East Ltd., said: "Sentiments among Saudi Arabia's business community in the hydrocarbon and non-hydrocarbon sectors have moderated as the BOIs have slipped this quarter."
© Arab News 2015
