Expansion of nonoil producing private sector gains momentum

Updated 05 September 2014
0

Expansion of nonoil producing private sector gains momentum

The Saudi British Bank (SABB) has published the results of the headline SABB/HSBC Saudi Arabia Purchasing Managers’ Index (PMI) for August 2014 — a monthly report issued by the bank and HSBC.
It reflects the economic performance of Saudi nonoil producing private sector companies through monitoring a number of variables, including output, orders, prices, stocks and employment.
The expansion of Saudi Arabia’s nonoil producing private sector gained momentum during August, with output, new orders and employment all increasing at stronger rates compared to July.
Inventory accumulation also strengthened as companies retained optimism regarding future activity requirements, leading to another marked increase in purchasing activity.
Vendors reacted positively to greater requirements for inputs by improving their delivery performance at a marked pace.
The headline index from the report, the seasonally adjusted SABB/HSBC Saudi Arabia Purchasing Managers’ Index (PMI), improved in August to a level of 60.7, from July’s 60.1. That was the best reading since July 2011 and signaled acceleration in growth for the third month in a row.
Driving the SABB/HSBC PMI Index higher were stronger gains in both output and new orders.
Latest research data showed that output increased to the sharpest degree since June 2011 while the rise in sales was the strongest for nearly two years.
Many companies reported an improvement in underlying demand as market conditions strengthened, both at home and abroad.
New export sales increased at the strongest pace since March with demand from companies reported to have strengthened.
Good reputations for business helped to build client relationships and support sales growth according to research participants.
As incoming new business continued to increase, the pressure on capacity was sustained. Backlogs of work rose for a 19th successive month, albeit at a rate that was down on July’s survey record.
Participants in the SABB/HSBC Index study responded to the increase in workloads by recruiting more staff. Net employment increased further and at the best rate since March 2013, according to latest data.
Reflective of some optimism for future activity and business requirements, companies continued to increase purchasing activity during August. Growth was again sharp, and accelerated since the previous research period.
With delivery times for inputs continuing to shorten, companies were able to replenish their inventories, with stocks of purchases increasing to the greatest degree since March 2013.
Meanwhile, on the price front, average input costs continued to increase during August, albeit at a slower rate. Purchase price increases weakened to a three-month low, but staffing costs rose at a slightly faster pace. Output charge increases remained modest.


Saudi Arabia vows full support for struggling Lebanon

Updated 2 min 12 sec ago
0

Saudi Arabia vows full support for struggling Lebanon

  • "We are interested to see stability in Lebanon and we will support Lebanon all the way," Saudi Arabia’s finance minister said
  • Lebanon has one of the world's highest levels of public debt compared to GDP and stagnant growth

DUBAI: Saudi Arabia has said it will provide “full assistance” to Lebanon, as the country continues to face a sluggish economy, Saudi Arabia’s finance minister said.

"We are interested to see stability in Lebanon and we will support Lebanon all the way," Mohammed Al-Jadaan told American broadcaster CNBC at the World Economic Forum (WEF) in Davos.

"We are also determined to making sure that we play our role as a catalyst of stability in the region," he added.

Al-Jadaan’s statement comes after Qatar announced its plans to buy $500 million worth of sovereign bonds to boost Beirut's bond market.

Lebanon has one of the world's highest levels of public debt compared to GDP and stagnant growth.