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.


Pay for Britain’s top bosses rises 23 percent

Updated 15 August 2018
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Pay for Britain’s top bosses rises 23 percent

  • Excessive corporate pay has attracted public anger since the financial crisis
  • The increase far exceeds the 2.5 percent increase in average salaries for British workers to £29,009

LONDON: Pay packages for the bosses of Britain’s 100 biggest listed firms rose 23 percent over the past year, fueled by payouts for the CEOs of house builder Persimmon and industrial firm Melrose Industries, a survey showed on Wednesday.
Excessive corporate pay has attracted public anger since the financial crisis and Prime Minister Theresa May has denounced the gap between the amounts paid to bosses and average workers as irrational and unhealthy.
The survey by the Chartered Institute of Personnel and Development (CIPD) and the High Pay Center thinktank showed the average income for chief executives of companies in the FTSE 100 share index was £5.7 million ($7.25 million) in their financial year ending in 2017, up 23 percent from the previous year.
The increase far exceeds the 2.5 percent increase in average (mean) salaries for British workers to £29,009, according to the Office for National Statistics.
A similar study a year ago showed bosses’ average pay had dropped by 17 percent over the previous year.
CIPD said the strong performance of the stock market in the years to 2017 was probably a factor in this year’s increase but that this should prompt questions about the contribution of individual bosses to share performance as opposed to other factors such as economic context or the wider workforce.
The CIPD report said the mean figure was skewed by very large payouts to the bosses of house builder Persimmon and Melrose Industries.
Excluding these two chief executives would bring the mean single figure down from £5.7 million to £4.8 million, still representing a 6 percent increase from the previous year.
The highest paid CEO in the financial year ending 2017 was Persimmon’s Jeff Fairburn, who received £47.1 million, more than 20 times his pay in 2016, largely due to a long-term incentive plan dating back to 2012.
That plan gave share options to managers of Britain’s second-biggest house builder which they could sell once the company had returned a set level of cash and dividends to investors.
In February 2018 it scaled back these rewards amid criticism that a government scheme had bolstered house builders.
Simon Peckham, chief executive of Melrose Industries, an industrial turnaround specialist that clinched an £8 billion hostile takeover of British engineer GKN in March, was paid £42.8 million in the financial year ending in 2017, mainly due to a 2012 incentive plan.
A Melrose spokesman highlighted the impact of the long-term incentive plan, adding: “The salary and bonus of the CEO was £974,000 last year which puts him squarely in line with the average pay ratio for employees as evidenced in the report.”
A spokeswoman for Persimmon was not immediately available to comment.