Saudi private sector growth surges to 13-month high: PMI survey

The PMI survey noted that employment growth rose slightly to 51 from December’s 20-month low, as 2.5 percent of the firms surveyed reported increased hiring. (AFP)
Updated 05 February 2019
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Saudi private sector growth surges to 13-month high: PMI survey

  • The increase was driven by a surge in new orders and a rebound in output and employment
  • ‘Firms were able to reduce selling prices as their purchasing costs also declined in January’

DUBAI: Growth in Saudi Arabia’s non-oil private sector rose to a 13-month high in January, lifted by an acceleration in new orders growth, a survey showed on Tuesday.
The seasonally adjusted Emirates NBD Saudi Arabia Purchasing Managers’ Index rose to 56.2 in January from 54.5 in December, hitting its highest level since December 2017. Any level above 50 indicates expansion.
The increase was driven by a surge in new orders and a rebound in output and employment. The new orders sub-index rose to 62.8 in January from 58.4 a month earlier.
New order growth appeared to be “domestically driven, as export orders remained broadly flat month-on-month”, said Khatija Haque, Head of MENA Research at Emirates NBD.
Part of the growth was probably due to price discounts, as output prices continued to drop for the sixth time in the past seven months, and with the highest rate of decline since February last year.
“Firms were able to reduce selling prices as their purchasing costs also declined in January,” Haque added.
The output sub-index increased slightly, to 58.6 from 58.2.
Employment growth rose slightly to 51 from December’s 20-month low, as 2.5 percent of the firms surveyed reported increased hiring.


Head of Saudi Arabia’s SRC: ‘Ask banks for a mortgage, and we will refinance it’

Updated 25 April 2019
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Head of Saudi Arabia’s SRC: ‘Ask banks for a mortgage, and we will refinance it’

  • SRC CEO Fabrice Susini: One of our key objectives is to ensure that the banks are extending loans to more and more people
  • Extending home-ownership is one of the cornerstones of the Vision 2030 strategy to diversify the economy away from oil production

RIYADH: The head of the state-owned Saudi Real Estate Refinance Company (SRC) has made an unprecedented offer to the Kingdom’s home-seekers to underwrite future mortgages.
Speaking at the Financial Sector Conference in Riyadh, Fabrice Susini, SRC CEO, told the audience: “Ask them (the banks) for a mortgage, and we will refinance it.”
Although Susini later clarified his remarks to show that he still expected normal standards of mortgage applications to be met, the on-stage show of bravado illustrates SRC’s commitment to facilitate home-ownership in the Kingdom.
“Obviously if you have no revenue, no income, poor credit history, that will not apply. Now if you have a job, it is different. We have people in senior positions at big foreign banks that could not get a mortgage,” he explained.
He said that Saudi banks have traditionally assessed mortgages on the basis of “flow stability” of earnings. Government employees, or those of big corporations like Saudi Aramco and SABIC, found it easy to get mortgages “because you were there for life.”
“One of our key objectives is to ensure that the banks are extending loans to more and more people. The government is pushing for entrepreneurship, private development, private jobs. If you work in the private sector and cannot get a mortgage the next thing you will do is go to the government for a job,” Susini said.
Extending home-ownership is one of the cornerstones of the Vision 2030 strategy to diversify the economy away from oil production. Saudi Arabia has one of the lowest rates of mortgage penetration of any G20 country — in single digit percentages, compared with others at up to 50 percent.