Saudi non-oil business activity expands at quickest pace since Dec. 2017

Saudi non-oil business activity expands at quickest pace since Dec. 2017
Saudi Arabia’s General Authority for Statistics reported a Y0Y increase in the non-oil economy in Q1. (Argaam)
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Updated 03 June 2021

Saudi non-oil business activity expands at quickest pace since Dec. 2017

Saudi non-oil business activity expands at quickest pace since Dec. 2017
  • Export orders increased at the fastest rate since 2015
  • Hiring was largely flat in May

RIYADH: Saudi Arabian non-oil business activity expanded at its fastest rate since December 2017, as new business and export orders increased, according to a survey released on Thursday.

The seasonally adjusted IHS Markit Saudi Arabia Purchasing Managers’ Index (PMI) rose for the second month in a row, from 55.2 in April to 56.4 in May. A score above 50 indicates expansion, while below 50 points to contraction.

While activity is recovering from the pandemic slump, the impact has not yet been felt in recruitment; hiring increased for the second month in a row, but the pace slowed.

As pandemic restrictions begin to loosen, 30 percent of companies said they had seen an increase in business activity, and export orders increased at the fastest rate since 2015.

“Most firms continued to operate with unchanged workforce numbers, suggesting a focus on boosting productivity back to pre-COVID levels,” said David Owen, an economist at IHS Markit. “On the plus side, inventories were increased at the quickest pace in a year-and-a-half as firms prepare for a further recovery in demand over the coming months.”

Last month, a “flash estimate” from the Kingdom’s General Authority for Statistics (GAS) showed that the non-oil economy grew by 3.3 percent year-on-year in the first quarter, its first positive outcome on an annualized basis since last March.

Despite the robust performance from the non-oil sector, real gross domestic product was 3.3 percent down year-on-year.

“The year-on-year change was the result of the sharp decrease in the oil activities of minus 12 percent due to ongoing crude oil production cuts agreed by OPEC+ since May 2020,” GAS said.

In addition to cuts agreed by OPEC+, the oil producers’ alliance led by Saudi Arabia and Russia, the Kingdom decided on an extra voluntary cut of one million barrels of oil per day last February.

Jason Tuvey, analyst at London-based Capital Economics, said: “With oil output cuts now being eased and the vaccination program gathering pace, the economic recovery should get back on track over the rest of this year.”


Egypt completes manufacturing of 5 million COVID vaccine doses

Egypt completes manufacturing of 5 million COVID vaccine doses
Updated 16 September 2021

Egypt completes manufacturing of 5 million COVID vaccine doses

Egypt completes manufacturing of 5 million COVID vaccine doses
  • Health Minister Hala Zayed said an additional production line is being prepared at the Giza plant

CAIRO: Egypt has finished manufacturing 5 million doses of coronavirus vaccine – 2.5 million of which will be released this week.

Health Minister Hala Zayed said an additional production line is being prepared at the Giza plant, which will be operational in November. It will have a capacity of 300,000 doses per day.

Around 17 million doses of AstraZeneca, Sinovac, Johnson & Johnson, Moderna, Sputnik, and Pfizer vaccines were supplied and distributed by the health ministry in September.

Five million doses of the Sinopharm vaccine were donated, as well as 100,000 to 250,000 doses AstraZeneca.

The ministry worked with local governorates to deliver the vaccines, as the government scrambles to speed up vaccinations in the country of 100.4 million people.

Zayed said 13 million citizens have been vaccinated so far – 584,000 of whom got the jab for travel purposes.

The minister reviewed the country’s capacity to attend to COVID-19 patients, saying around 3.380 million liters of oxygen are still in stock.

She also reviewed facilities and equipment of central care hospitals, as well as efforts to expand them.


Philip Morris’ ‘smoke free’ plan advances with $1.5bn deal for UK’s Vectura

Philip Morris’ ‘smoke free’ plan advances with $1.5bn deal for UK’s Vectura
Image of Philip Morris factory
Updated 16 September 2021

Philip Morris’ ‘smoke free’ plan advances with $1.5bn deal for UK’s Vectura

Philip Morris’ ‘smoke free’ plan advances with $1.5bn deal for UK’s Vectura
  • Chief Executive said the acquisition of Vectura was a critical part of his strategy to move the company "Beyond Nicotine"
  • Asthma UK and the British Lung Foundation said they have sent a letter urging the UK government to look into any conflict of interest issues

LONDON: Cigarette maker Philip Morris (PMI) clinched its £1.1 billion ($1.5 billion) takeover of asthma inhaler maker Vectura on Thursday, as part of the company’s long term plan to develop “smoke-free” products and switch to being a “broader healthcare and wellness” company.

The deal won the support of the British company’s shareholders who decided to take the 165 pence-per-share offer from PMI, with nearly 75 percent backing the deal but angered health groups such as Asthma UK and the British Lung Foundation that have questioned whether a tobacco group should own a company that cures the very respiratory illnesses cigarettes cause.

PMI Chief Executive Jacek Olczak has argued that acquiring Vectura is a critical part of his strategy to move the company “Beyond Nicotine.”

He told the Telegraph last month that opponents of the deal were “not interested in progress” and accused them of “settling old scores” with the tobacco industry.

Olczak said PMI would provide Vectura’s scientists with the resources and expertise to reach its goal of generating at least $1 billion in net revenue from “Beyond Nicotine” products by 2025.

In the meantime, Asthma UK and the British Lung Foundation said they have sent a letter urging the UK government to look into any conflict of interest issues.

The letter was co-signed by 35 charities, public health experts and clinicians.

“There’s now a very real risk that Vectura's deal with big tobacco will lead to the cigarette industry wielding undue influence on UK health policy,” said Sarah Woolnough, Chief Executive of Asthma UK and the British Lung Foundation.

PMI has received regulatory clearances for the deal and following the public tender process, its offer cannot now be withdrawn.

While the company received the 50 percent threshold to make its offer unconditional, it has not yet reached the 75 percent of shares it needs to delist Vectura.

PMI said it was extending its offer to Sept. 30, to give Vectura shareholders time to accept its proposal.


Amazon brings free cloud skills training program to unemployed in MENA

Amazon brings free cloud skills training program to unemployed in MENA
Amazon Web Services will help unemployed and underemployed people
Updated 16 September 2021

Amazon brings free cloud skills training program to unemployed in MENA

Amazon brings free cloud skills training program to unemployed in MENA

DUBAI: Technology giant Amazon is launching its free cloud computing training program in the Middle East and North Africa, as the region puts more premium on tech-based skills.

The program will help unemployed and underemployed people in the region, Amazon Web Services said in a statement, and connect them with local employers.

The first cohorts are taking place in Egypt, Lebanon, and Tunisia, and will later expand to additional countries in the Gulf.

Participants of the 12-week program, called “AWS re/Start,” will learn entry-level cloud computing functions, and will also include career coaching – all delivered by accredited instructors, Amazon said.

“As cloud adoption continues to grow in MENA, we look forward to expanding the program to more countries and helping to bridge the gap for in-demand cloud skill,” said Tejas Vashi, Amazon's global team lead of the program.

The company has partnered with local firms in the countries they are launching the program.

It comes as the region pursues aggressive efforts to boost digital industries, with governments in Saudi Arabia and the UAE launching key policy initiatives centered on technology.


KSA and South Africa look to technology, desalination collaboration

KSA and South Africa look to technology, desalination collaboration
Image: Shutterstock
Updated 16 September 2021

KSA and South Africa look to technology, desalination collaboration

KSA and South Africa look to technology, desalination collaboration
  • Bilateral trade is still currently dominated by crude oil and its byproducts
  • Both countries share a desire for a diversified economy not dependent on the export of raw natural resources

South Africa has a long trading relationship with the Kingdom, and sees it as an important and strategic market in the Middle East for trade and co-operation in technology and water desalination, as well as for South African goods and services. 

Ahead of a Joint Business Hybrid In Person/Webinar to be hosted by the Federation of Saudi Chambers on Thursday, Arab News spoke to Imran Simmins, First Secretary Political at the South African Embassy in Riyadh, who said the bilateral trade is still currently dominated by crude oil and its byproducts.  

Business representatives in agriculture, food and entertainment, industry, healthcare, technology, tourism, defence, and mining sectors see plenty of potential for collaboration between both countries, and will use the event to explore bilateral growth opportunities together.

“Commodities from South Africa are mainly agricultural products and live animals. On the basis of Vision 2030 and the NDP 2030, with their focus on industrialization, we envisage a future dominated by trade in manufactured products,” Simmins said.

Before the COVID-19 outbreak, both countries committed to use technology to improve their economies. He said the pandemic has forced technology to play a more central role in life in general, as well as how specifically economic activity is conducted. 

“This is one major field in which both countries will be collaborating in the future,” Simmins added.

Simmins added: “South Africa is becoming drier and drier with each drought spell being more serious and expansive than the previous one. The country is beginning to look beyond rainwater for its livelihood. Saudi’s seawater desalination expertise will definitely be crucial.”

Both countries share a desire for a diversified economy not dependent on the export of raw natural resources, a key part of both their developmental plans; the National Development Plan (NDP) in South Africa and Vision 2030 in Saudi Arabia.

This has seen both nations commit to cleaner forms of energy despite being endowed with coal (South Africa) and the crude oil (from the Kingdom) that dominates trade relations. 

In 2018, King Salman announced a $10 billion investment in the South African economy. 

Aramco and the South African Ministry of Energy are currently exploring the possibility of building an oil refinery and a petrochemical plant in Richards Bay, on the country's north east coast. The refinery will serve the entire Southern African region. 

Trade in technology, goods, and services will need every assistance available from bilateral trade events before oil and natural resources cease to dominate trade between South Africa and the Kingdom.

 


Swiss government lowers 2021 GDP forecast

Swiss government lowers 2021 GDP forecast
Image: Shutterstock
Updated 16 September 2021

Swiss government lowers 2021 GDP forecast

Swiss government lowers 2021 GDP forecast
  • The economic slump in 2020 was not quite as severe, meaning the catch-up potential is also lower overall
  • The upturn is expected to pick up next year with growth anticipated at a rate of 3.4 percent 

Switzerland’s economy is expected to grow by 3.2 percent this year, the government said on Thursday, lowering its full year outlook as a less sunny global picture limited Switzerland’s recovery.

“The economic recovery is set to continue as expected, though growth is initially less dynamic than forecast previously,” the State Secretariat for Economic Affairs (SECO) said in a statement.

A less vigorous global recovery, marked by capacity bottlenecks limiting the growth of global industrial production and tightened coronavirus measures hampering the services sector in some countries, meant Switzerland’s economic recovery was expected to grow less this year than the 3.6 percent growth it forecast in June, the government expert group found.

“The downward revision compared with the June forecast (+3.6 percent) is also due to the fact that, according to the latest data, the economic slump in 2020 was not quite as severe, meaning the catch-up potential is also lower overall.”

The upturn is expected to pick up next year, with the Swiss economy anticipated to grow by 3.4 percent in 2022, the government said, higher than its previous forecast of 3.3 percent.