PHOTO
06 June 2016
JEDDAH: Saudi Arabia's non-oil private sector looked to be in good shape midway through the second quarter, as business conditions improved to the greatest extent since last November.
Both output and new orders rose sharply in May, with the rate of expansion in the latter picking up to a five-month high.
Companies raised their input buying at a faster pace, in line with current growth and projections of future improvements in demand.
However, employment increased only modestly.
On the price front, cost pressures remained subdued, while charges fell for the seventh month in a row.
The survey, sponsored by Emirates NBD and produced by Markit, contains original data collected from a monthly survey of business conditions in the Saudi private sector.
Commenting on the Emirates NBD Saudi Arabia PMI, Khatija Haque, head of MENA Research at Emirates NBD, said:
"The rise in the Saudi PMI to the highest reading in six months is encouraging, as it shows the resilience of the non-oil economy even in the face of tighter fiscal policy. Domestic demand remains robust, even as export demand has softened."
The headline seasonally adjusted Emirates NBD Saudi Arabia Purchasing Managers' Index (PMI) - a composite gauge designed to give a single-figure snapshot of operating conditions in the non-oil private sector economy - climbed to a six-month high of 54.8 in May, from 54.2 in April. That was indicative of a robust improvement in the health of Saudi Arabia's non-oil private sector.
However, growth was still relatively muted as the latest figure remained closer to January's record low (53.9) than the long-run series average (58.6).
A sharp expansion of new business was a key positive takeaway in the latest survey period.
The rate of increase was the most marked since the turn of the year, with panellists commenting on new project start-ups and the introduction of new products.
Data highlighted the strength of domestic demand in particular, as exports declined for the second month running.
Higher new work led to another rise in output during May.
The pace of expansion was substantial, albeit the slowest in three months.
There were reports that better marketing had also contributed to growth.
With new orders rising and anecdotal evidence pointing to expectations of future improvements in demand, purchasing activity increased at a faster pace. Stocks of inputs followed suit - the rate of inventory building accelerated to a five-month high.
Jobs growth remained modest, however. Though slightly quicker than in April, the rate of hiring was weak in the context of historical data. Meanwhile, backlogs of work increased marginally, continuing the trend recorded throughout 2016 so far.
Total cost pressures in Saudi Arabia's non-oil private sector eased during May. In fact, the rate of inflation was the second-slowest recorded since the series began in August 2009.
Data signalled relatively muted rises in both salaries and purchasing costs. With input prices increasing only modestly, firms were able to reduce charges for the seventh straight month.
The latest decline was the quickest since February, albeit moderate overall.
A number of respondents indicated that they had lowered output prices in order to remain competitive.
In addition, Emirates NBD has a large social media following and is the only bank in the Middle East ranked among the top 25 ranking in the 'Power 100 Social Media Rankings', compiled by The Financial Brand.
It is a major player in the UAE corporate and retail banking arena and has strong Islamic Banking, Global Markets & Treasury, Investment Banking, Private Banking, Asset Management and Brokerage operations.
The group has operations in the UAE, Egypt, Saudi Arabia, Singapore, the United Kingdom and representative offices in India, China and Indonesia.
The group is an active participant and supporter of the UAE's main development initiatives and of the various educational, environmental, cultural, charity and community welfare establishments.
JEDDAH: Saudi Arabia's non-oil private sector looked to be in good shape midway through the second quarter, as business conditions improved to the greatest extent since last November.
Both output and new orders rose sharply in May, with the rate of expansion in the latter picking up to a five-month high.
Companies raised their input buying at a faster pace, in line with current growth and projections of future improvements in demand.
However, employment increased only modestly.
On the price front, cost pressures remained subdued, while charges fell for the seventh month in a row.
The survey, sponsored by Emirates NBD and produced by Markit, contains original data collected from a monthly survey of business conditions in the Saudi private sector.
Commenting on the Emirates NBD Saudi Arabia PMI, Khatija Haque, head of MENA Research at Emirates NBD, said:
"The rise in the Saudi PMI to the highest reading in six months is encouraging, as it shows the resilience of the non-oil economy even in the face of tighter fiscal policy. Domestic demand remains robust, even as export demand has softened."
The headline seasonally adjusted Emirates NBD Saudi Arabia Purchasing Managers' Index (PMI) - a composite gauge designed to give a single-figure snapshot of operating conditions in the non-oil private sector economy - climbed to a six-month high of 54.8 in May, from 54.2 in April. That was indicative of a robust improvement in the health of Saudi Arabia's non-oil private sector.
However, growth was still relatively muted as the latest figure remained closer to January's record low (53.9) than the long-run series average (58.6).
A sharp expansion of new business was a key positive takeaway in the latest survey period.
The rate of increase was the most marked since the turn of the year, with panellists commenting on new project start-ups and the introduction of new products.
Data highlighted the strength of domestic demand in particular, as exports declined for the second month running.
Higher new work led to another rise in output during May.
The pace of expansion was substantial, albeit the slowest in three months.
There were reports that better marketing had also contributed to growth.
With new orders rising and anecdotal evidence pointing to expectations of future improvements in demand, purchasing activity increased at a faster pace. Stocks of inputs followed suit - the rate of inventory building accelerated to a five-month high.
Jobs growth remained modest, however. Though slightly quicker than in April, the rate of hiring was weak in the context of historical data. Meanwhile, backlogs of work increased marginally, continuing the trend recorded throughout 2016 so far.
Total cost pressures in Saudi Arabia's non-oil private sector eased during May. In fact, the rate of inflation was the second-slowest recorded since the series began in August 2009.
Data signalled relatively muted rises in both salaries and purchasing costs. With input prices increasing only modestly, firms were able to reduce charges for the seventh straight month.
The latest decline was the quickest since February, albeit moderate overall.
A number of respondents indicated that they had lowered output prices in order to remain competitive.
In addition, Emirates NBD has a large social media following and is the only bank in the Middle East ranked among the top 25 ranking in the 'Power 100 Social Media Rankings', compiled by The Financial Brand.
It is a major player in the UAE corporate and retail banking arena and has strong Islamic Banking, Global Markets & Treasury, Investment Banking, Private Banking, Asset Management and Brokerage operations.
The group has operations in the UAE, Egypt, Saudi Arabia, Singapore, the United Kingdom and representative offices in India, China and Indonesia.
The group is an active participant and supporter of the UAE's main development initiatives and of the various educational, environmental, cultural, charity and community welfare establishments.
© Arab News 2016
