Eurozone’s private sector conditions improve following a six-month low in October: Economic wrap

Eurozone’s private sector conditions improve following a six-month low in October: Economic wrap
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Updated 23 November 2021

Eurozone’s private sector conditions improve following a six-month low in October: Economic wrap

Eurozone’s private sector conditions improve following a six-month low in October: Economic wrap

The euro area’s business activity growth picked up pace in November, following its six-month low in the previous month, IHS Markit revealed. 

The composite Purchasing Managers’ Index for the zone reached 55.8 in November, compared to 54.2 in October, according to flash estimates by the London-based firm.

However, high inflation in the area remained an issue as both costs and average selling prices went up by record rates.

Although confidence about the outlook dropped to a 10-month low — partly due to a revival of Covid-19 concerns — firms faced stronger demand in November, pulling the rate of job creation to its second highest level in 21 years.

The services sector had a stronger performance compared to manufacturing, as its growth reached a three-month high. The manufacturing sector also experienced a rebound in November, despite expanding at the second-lowest level in the previous 17 months.

The Consumer Confidence Index fell significantly in both the EU and the eurozone in November as they went down by 2.1 percent and 2.0 percent respectively compared to October.

The indicator reached -8.2 for the EU and -6.8 for the euro area, the European Commission said.

The index fell below the pre-pandemic level for the EU while it was close to that level for the eurozone. However, it remained above its long-term average.

UK’s private sector

The UK’s composite PMI ticked down to 57.7 in November from 57.8 in the previous month, flash estimates by IHS Markit showed.

Similar to the eurozone, the services sector outperformed the manufacturing industry as client demand picked up pace and pandemic-related restrictions were relaxed. The manufacturing sector expanded at its highest level in three months as well.

On the flip side, input cost inflation reached record levels in November due to wage hikes and jumps in the costs of energy, fuel and raw materials.

Meanwhile, employment levels underwent some improvements as customer demand and higher backlogs of work drove the increase.

In addition, new order intakes grew by the highest levels since June while exports rose only slightly.

Australia’s economy

Growth of the Australian private sector increased in November on the back of better conditions in both the services and the manufacturing sectors, according to flash estimates by IHS Markit.

Composite PMI for the country reached an initial reading of 55 in November, a five-month high and up from the previous month’s 52.1. Output and demand growth in the private sector rose in November as Covid-19-induced restrictions eased off. Business confidence and employment conditions also improved.

Supply chain disruptions remained an issue in the private sector. This, along with transportation and labor issues, were causing higher prices.

In another economic development for Australia, the country’s central bank said that it would closely examine asset prices to check if there are bubbles as interest rates hit record low levels, Bloomberg reported.

Favorable EM debt securities

Rising interest rates triggered by emerging markets’ central banks means that their debt will be more attractive for investors, according to private equity giant BlackRock. 

It will also provide a buffer in the event of policy tightening by the US Federal Reserve. 

“We prefer local-currency bonds of higher-yielding countries with solid current account balances,” global chief investment strategist at BlackRock, Wei Li, said.

However, this could negatively affect stocks and equities in these countries, the firm added.

Singapore’s core inflation

Singapore’s core inflation rate, which excludes changes in food and energy prices, increased to 1.5 percent in October, posting the highest jump in nearly 3 years, the Monetary Authority of Singapore revealed. 

This builds on the previous month’s inflation of 1.2 percent.

This was driven by higher prices of services and food as they rose annually by 1.6 and 1.7 percent respectively. 

In addition, consumer prices as a whole went up by a yearly rate of 3.2 percent in October, compared to 2.5 percent in September.

Poland’s interest rates

Poland’s central bank is expected to hike interest rates to pre-pandemic levels, according to Bloomberg. This comes at a time when inflationary pressures in the country are mounting.


Elaf Group to launch new hospitality brand Joudyan next month

Elaf is a leading hospitality player.
Elaf is a leading hospitality player.
Updated 13 sec ago

Elaf Group to launch new hospitality brand Joudyan next month

Elaf is a leading hospitality player.
  • The company currently has nine hotels and plans to double this number in the next three to five years and triple the number in the next 10 years

RIYADH: Elaf Group, one of the leading hospitality players in the region, plans to launch a new hotel brand called Joudyan.
“We will be launching Joudyan, our first outside Makkah and Madinah,” Adel Ezzat, CEO of Elaf Group, told Arab News on the sidelines of the Future Hospitality Forum in Riyadh.
He added that the new brand would be launched in Riyadh, Dammam and other tourism hotspots such as Jeddah and AlUla.

FASTFACTS

• The company currently has nine hotels and plans to double this number in the next three to five years and triple the number in the next 10 years.

• Elaf hotels are a mix of five- and four-star hotels that offer a unique experience of the local feel of the Kingdom to the visitors.

The company currently has nine hotels and plans to double this number in the next three to five years and triple the number in the next 10 years.
Elaf hotels are a mix of five- and four-star hotels that offer a unique experience of the local feel of the Kingdom to the visitors.
“We are a local brand, yet we have maintained international standards with local concepts, which is bringing to the visitors the real meaning of Saudi hospitality,” said Ezzat.
The company is also planning to expand across the Gulf Cooperation Council and the Middle East regions while setting its eyes on the European market.


Aleph Hospitality eyes travel, tourism opportunities in KSA

Bani Haddad. (Supplied)
Bani Haddad. (Supplied)
Updated 7 min 5 sec ago

Aleph Hospitality eyes travel, tourism opportunities in KSA

Bani Haddad. (Supplied)
  • Haddad said that the internal market is quite strong from a demand standpoint

RIYADH: Aleph Hospitality, a leading Dubai-based independent hotel management company, is planning to open offices in Jeddah,
Makkah and Madinah to tap Saudi Arabia’s growing travel and tourism industry.
“Saudi Arabia represents about 30 million domestic travelers.
Our expectations from the Kingdom are quite high,” Bani Haddad, the founder and managing director of Aleph Hospitality, told Arab News on the sidelines of the Future Hospitality Summit in Riyadh.

Saudi Arabia represents about 30 million domestic travelers. Our expectations from the Kingdom are quite high.

Bani Haddad

Haddad said that the internal market is quite strong from a demand standpoint. The situation is highly encouraging if one includes religious tourism, open visa policies, development in the region’s secondary cities, and expansion of the airlines and airlifts.
“So, the fundamentals are becoming more and more solid for the hospitality sector to flourish,” he added.
Because Aleph Hospitality is an independent operator, Haddad said the company services properties ranging from two- to five-stars in city centers and small to large resorts.
He explained that the company’s flexibility allows them to service investors in that sector.

 


Hospitality business trained to deal with pandemics: Azadea official

Mert Askin
Mert Askin
Updated 16 min 38 sec ago

Hospitality business trained to deal with pandemics: Azadea official

Mert Askin
  • Lebanon-based retail chain Azadea Group sells fashion, sports, home furnishings and food and drink

RIYADH: The hospitality industry has steeled itself for another pandemic after suffering the effects of the last health crisis, said Mert Askin, Azadea Group’s president of food and beverage.
In an exclusive interview with Arab News on the sidelines of the Future Hospitality Summit in Riyadh, Askin said that the industry is yet to recover from the pandemic because certain restrictions remain in place, such as some regulated air travel.
Askin added: “We are recovering. We are growing. And I’m optimistic about the future because this pandemic taught us a lot of things. This is not going to be the last pandemic, there may be more to come. But we are now trained to manage this kind of difficult situation.”
Lebanon-based retail chain Azadea Group sells fashion, sports, home furnishings and food and drink. Its food brands include Paul, Columbus Cafe & Co. and Eataly. The group, founded in 1978, employs over 10,000 staff across more than 550 stores in 13 countries including Saudi Arabia, Algeria, Bahrain, Egypt, Lebanon, Qatar and the UAE.

I’m optimistic about the future because this pandemic taught us a lot of things.

Mert Askin

The group’s food and drinks head pointed out that the firm’s core business had not changed despite the pandemic.
Askin said: “Our core is people — our team. As well as the customer, and how we operate together. That core will not change. But we definitely have a lot more technology tools at our disposal.”
He added that the group’s revenues are climbing and are close to pre-pandemic levels.
Saudi Arabia is Azadea Group’s second-largest market, and Askin added that the business wants to change with the Kingdom as it opens up and transforms its hospitality sector.
Askin said: “Saudi (Arabia) is changing, and we want to change with Saudi (Arabia). We believe in Vision 2030. We are committed to it, and we want to be a part of the program by growing with the country as it opens up. There is a lot of investment flooding into the industry. And we want to benefit from that tailwind and grow our business.”
Saudi nationals currently make up around a quarter of the staff the group employs.
Askin added: “Today, approximately 20 to 25 percent of our team members are Saudis. And one thing that we use to attract more Saudis is recognizing and sharing their success stories, as well as providing growth opportunities.”


Rotana Hotels to triple Saudi Arabia presence to 6,000 rooms by 2026, says president & CEO

Rotana Hotel Management Corp. President and CEO Guy Hutchinson says visitor numbers to the region are beginning to normalize.
Rotana Hotel Management Corp. President and CEO Guy Hutchinson says visitor numbers to the region are beginning to normalize.
Updated 27 min 50 sec ago

Rotana Hotels to triple Saudi Arabia presence to 6,000 rooms by 2026, says president & CEO

Rotana Hotel Management Corp. President and CEO Guy Hutchinson says visitor numbers to the region are beginning to normalize.
  • This is one of the most exciting and dynamic regions in terms of hospitality, says Hutchinson

RIYADH: Rotana Hotels plans to build seven new hotels in Saudi Arabia, which will almost triple the number of rooms it runs to in the Kingdom to 6,000 over the next four years, says its president and CEO.

In an exclusive interview with Arab News on the sidelines of the Future Hospitality Summit in Riyadh, Rotana Hotel Management Corporation President and CEO Guy Hutchinson said its move was prompted by Saudi’s growing tourism market.

He said: “Without doubt, this is one of the most exciting and dynamic regions at the moment anywhere in the world in terms of hospitality development.”

FASTFACTS

• The hotel chain also backs the Kingdom’s sustainability program to cut CO2 emissions and energy waste.

• It plans to source local agricultural and farm products that will be served in its hotels.

The Abu Dhabi-based business currently operates seven hotels in the Kingdom — in Alkhobar, Jeddah, Makkah and Riyadh — hosting 2,100 rooms.

Sector growth

The move by the business is in line with the Kingdom’s Vision 2030 program, which bids to diversify the country’s economy, making it less reliant on oil, while boosting such areas as IT, business startups and tourism.

Vision 2030’s goal of attracting 100 million visitors to the Kingdom by the end of the decade is a key driver of the growth in the country’s hospitality sector, according to Hutchinson.

He added that the opening up of the country’s heritage cities and towns — such as AlUla and Jeddah — will attract more tourists over the coming years.

Hutchinson noted that visitor numbers to the region are beginning to normalize after almost grinding to a halt following the COVID-19 pandemic.

He said: “You’re seeing this pent up demand from people wanting to reclaim their lifestyles and to reclaim travel at a really unprecedented speed.”

Local produce to drive sustainability

The hotel chain also backs the Kingdom’s sustainability program to cut CO2 emissions and energy waste.

It plans to source local agricultural and farm products that will be served in its hotels.

Hutchinson said: “Sustainability is an enormous part of what we do as it is embedded in our culture. That’s an important part of being part of sustainable communities.”


Macro Snapshot — Britain’s private sector activity slows; Japan’s May factory activity grows at slowest rate in 3 months 

Macro Snapshot — Britain’s private sector activity slows; Japan’s May factory activity grows at slowest rate in 3 months 
Updated 24 May 2022

Macro Snapshot — Britain’s private sector activity slows; Japan’s May factory activity grows at slowest rate in 3 months 

Macro Snapshot — Britain’s private sector activity slows; Japan’s May factory activity grows at slowest rate in 3 months 

RIYADH: Momentum in Britain’s private sector slowed much more than expected this month, adding to recession worries as inflation pressures ratcheted higher, according to a business survey on Tuesday that showed rising pessimism.

S&P Global’s flash Composite Purchasing Managers’ Index, a monthly gauge of the services and manufacturing industries, slumped to 51.8 in May from 57.6 in April, its lowest level since February last year.

The preliminary reading was worse than all forecasts in a Reuters poll of economists, which had pointed to a drop to 57, and the scale of the fall was bigger than any seen pre-COVID-19.

“The collapse in the composite PMI in May is the clearest sign yet that demand is faltering in response to the intense squeeze on households’ real disposable incomes,” said Samuel Tombs, chief UK economist at Pantheon Macroeconomics.

Until now, most surveys of British business activity had been fairly robust, despite record-low consumer confidence after inflation hit a 40-year high of 9 percent.

US new home sales fall

Sales of new US single-family homes tumbled to a two-year low in April, likely as higher mortgage rates and soaring prices squeezed first-time buyers and those in search of entry-level properties out of the housing market.

New home sales plunged 16.6 percent to a seasonally adjusted annual rate of 591,000 units last month, the lowest level since April 2020, the Commerce Department said on Tuesday. March’s sales pace was revised down to 709,000 units from the previously reported 763,000 units.

Sales have now declined for four straight months. New home sales dropped 5.9 percent in the Northeast and tumbled 15.1 percent in the Midwest. They plummeted 19.8 percent in the densely populated South and decreased 13.8 percent in the Midwest.

Nigeria raises interest rate 

Nigeria’s central bank on Tuesday raised the benchmark interest rate by 150 basis points to 13 percent, its first hike in more than two years, to combat rising inflation, sending markets tumbling.

The move surprised analysts and traders who expected the Monetary Policy Committee to keep the rate on hold.

But Gov. Godwin Emefiele told a news briefing that the rate hike was necessary to tame inflation, which quickened to 16.82 percent in April, its highest in eight months, amid a fragile economic recovery.

Indonesia holds rates

Indonesia’s central bank announced on Tuesday more aggressive hikes in the reserve requirement ratio for banks, expecting inflation to rise slightly above its target band this year, but kept interest rates unchanged at a record low.

Bank Indonesia announced a quicker pace in RRR hikes, ordering banks to park 7.5 percent of their reserves starting July and 9 percent from September. This compared with BI’s previously announced policy path, in which BI had set three staggered RRR hikes this year from 3.5 percent to 6.5 percent in September.

BI left the benchmark 7-day reverse repurchase rate at a record low of 3.50 percent, as expected by 25 of 27 economists polled by Reuters. Its two other main rates were also unchanged. 

Poland budget surplus

Poland had a budget surplus of 9.2 billion zlotys ($2.14 billion) at the end April, state-run news agency PAP quoted Finance Minister Magdalena Rzeczkowska as saying on Tuesday.

Poland had a deficit of 0.3 billion zlotys at the end of March.

Separately, a government spokesman said that the deficit at the end of 2021 was 26.4 billion zlotys, 65.1 percent of what had been planned for in the budget.

Philippines narrows growth target 

The Philippines has revised its 2022 gross domestic product growth target to 7 percent-8 percent from the previous range of 7 percent-9 percent to take into account external risks, the government said on Tuesday.

It also slightly lowered the budget deficit target to 7.6 percent of GDP from 7.7 percent, among revisions that it said took into account the impact of Russia-Ukraine conflict, China’s slowdown, and monetary policy normalization in the US.

The government, however, kept the GDP growth target at the 6 percent-7 percent range for 2023 and 2024, as it expects the domestic economy to sustain its strong recovery in the medium term.

GDP would grow at the same pace in 2025, the economic managers on the Development Budget Coordination Committee said.

German inflation to reach 7%

Germany’s 2022 inflation rate will more than double from last year’s 3.1 percent as already high energy and food prices are pushed up by the war in Ukraine, the country’s Chambers of Industry and Commerce said on Tuesday.

DIHK said it now expects the inflation rate to hit 7 percent, after initially forecasting a rise of 3.5 percent in its February forecast.

Germany’s Economy Ministry said in April it saw an inflation rate of 6.1 percent in 2022 and 2.8 percent next year, citing the effects of energy prices in Europe’s biggest economy.

French business activity 

French business activity slowed slightly in May compared to the previous month, a preliminary survey showed on Tuesday, as inflationary pressures took the shine off fewer COVID-19 restrictions.

S&P Global said its flash May Purchasing Managers’ Index for France’s services sector was 58.4 points — down from a final number of 58.9 in April. Economists polled by Reuters had forecast 58.6 for the May flash reading.

Japan’s factory activity grows 

Japan’s manufacturing activity expanded at the slowest pace in three months in May, as supply bottlenecks due to parts shortages and China’s COVID-19 lockdowns caused output and new orders growth to slow.

Activity in the services sector improved for the second consecutive month on stronger domestic demand due to the fading impact of the pandemic, though service-sector firms faced a drag from the sharpest rise in input prices on record.

 

(With input from Reuters)