The D&B Business Optimism Index is widely recognized as a key measure of the pulse of the business community, serving as a reliable benchmark for investors, policy makers and other observers of the economy worldwide.
The other highlights of the study include The Composite Business Optimism Index for the non-hydrocarbon sector, which has remained unchanged at 49 while the construction sector is most optimistic among all sectors for five of the six parameters reflecting the government’s plans to invest heavily in the country’s infrastructure.
Commenting on the findings of the survey, Phil Strange, CFO of Dun and Bradstreet South Asia Middle East Ltd., pointed out that the business community in the Kingdom remains optimistic about the short-term business outlook; the hydrocarbon composite index at 51 and non-hydrocarbon index at 49 continue to be very good scores. The hydrocarbon sector continues to be bullish on oil price outlook but, surprisingly, that is not seen translating into profit or employee growth.
"In general, the non-hydrocarbon sector appears to be in ‘wait and watch’ mode as they consider currently conflicting global economic indicators and look to them to coincide to give a firmer lead on where the economy is heading. The construction industry stands out as one sector where anticipated national demand for housing is boosting confidence," he said.
“With strong economic growth in emerging economies, particularly in Asia, continuing to underpin the global economy, business sentiment in the Kingdom showed improved outlook in the non-hydrocarbon sector for the fourth quarter, yet the optimism index remained unchanged from the last quarter," said Said Al-Shaikh, senior vice president and chief economist of the National Commercial Bank.
He added that the improved credit conditions along with continued government investment in infrastructure to have positively influenced the level of construction activities, as demonstrated by the rise in the optimism index of the sector to 60 points. In addition, he noted that — consistent with recent inflation figures in the Kingdom, driven by rising food prices and rents — the level of selling prices index has shown a reversal in the fourth quarter from the previous quarter.
