Kingdom’s nonoil business activity accelerates in June

Updated 03 July 2014
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Kingdom’s nonoil business activity accelerates in June

Growth in Saudi Arabia’s nonoil business activity rose to a five-month high in June, bolstered by strong growth in output and new orders, a survey showed.
The Saudi British Bank (SABB) has published the results of the headline SABB HSBC Saudi Arabia Purchasing Managers’ Index (PMI) for June 2014 — a monthly report issued by the bank and HSBC.
It reflects the economic performance of Saudi Arabian nonoil producing private sector companies through monitoring a number of variables, including output, orders, prices, stocks and employment.
June data signalled the continued expansion of the Saudi Arabian nonoil private sector, with the seasonally adjusted headline PMI recording 59.2, up from 57.0 in May.
This highlights a strong improvement in operating conditions and the highest since January.
The improvement in the headline PMI partly emanated from stronger growth in both output and new orders, while record-high buying activity was recorded. The pace of output growth quickened to a 26-month high. New business from abroad also improved, albeit at a slower pace than total new orders.
Companies sought to meet rising demand by ramping up output. Firms also recorded a further increase in backlogs of work as new business rose sharply. However, the rate of accumulation was slower than in the previous month and was moderate overall.
In response to growing signs of capacity constraints at their units, Saudi Arabian nonoil private sector firms increased their workforce numbers for a third successive month.
The net rise in employment was solid overall, with the latest increase the fastest in the current sequence of job creation.
Panellists signalled strong levels of optimism for growth by continuing to increase their purchasing activity during June. The latest data indicated the sharpest rise in input buying since the survey began in August 2009, as companies expanded their inventories in order to meet current levels of demand and in anticipation of higher future workloads. Consequently, stocks of purchases continued to build in June and the rate of increase was the sharpest in four months.
In spite of strong demand for inputs, average delivery times continued to improve. Better vendor performance was encouraged by a competitive market that required shorter delivery times.
Overall input costs in Saudi Arabia’s nonoil private sector continued to rise in June, and at a faster pace than the previous three months. Staff cost increases were marginal, with purchase prices the driving force behind the rise in overall input costs. Panellists linked higher purchasing costs to a strong level of demand present in the economy.
In response to increased cost inflation, companies raised their selling prices, albeit marginally, during June. The pace of expansion was fractional overall, with the vast majority of the panel reporting no change from the previous month.


Ford gets record fine in Australia for ‘unconscionable’ conduct

Updated 26 April 2018
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Ford gets record fine in Australia for ‘unconscionable’ conduct

SYDNEY: Car giant Ford is set to pay out A$10 million ($7.6 million) for its “unconscionable” handling of gearbox complaints in Australia after a court on Thursday slugged the auto manufacturer with a record penalty.
The Australian Competition and Consumer Commission (ACCC) began legal action against Ford last year after the car manufacturer failed to properly deal with thousands of complaints about shuddering in PowerShift transmissions fitted to its Fiesta, Focus and EcoSport models.
“Despite knowing that shuddering was a symptom of the quality issues with the vehicles, Ford frequently told customers that shuddering was the result of the customer’s driving style,” ACCC Chairman Rod Sims said in a statement.
“Ford knew that the symptoms of the quality issues with the vehicles were experienced intermittently but required customers to demonstrate them on demand in the presence of a dealer in order for repairs to be undertaken.”
The payout matches the largest-ever handed down under Australian consumer law, the ACCC said, equaling a $10-million penalty against supermarket chain Coles in 2014 for misusing its bargaining powers against suppliers.
“Ford knew that its vehicles had three separate quality issues but dealt with affected customers in a way which the Court has declared to be unconscionable,” Sims said.
About 75,000 cars fitted with the PowerShift transmission have been sold in Australia and over 10,000 people may be eligible for remediation after making complaints between May 2015 and November 2016.
“We were overwhelmed with the volume of complaints and, while it was not intended, over a ten-month period our processes were inadequate and information provided was either inaccurate or incomplete,” President of Ford Motor Company Australia Graeme Whickman said.
“We let our customers down and for that we are sorry,” he said in a statement.