Business activity in the non-oil private sector of the Arab world’s two biggest economies continued to expand in May as rising confidence amid roll out of Covid-19 vaccination at pace boosted new orders and domestic demand.
The IHS Markit Saudi Arabia Purchasing Managers' Index rose for the second month in a row to 56.4 in May from 55.2 in April. A reading above the 50-mark is an indicator of economic expansion while anything below points to a contraction.
The reading indicated a robust improvement in business conditions that was the fastest recorded since January, according to the survey.
A rise in the output Index propelled the expansion of the kingdom’s non-oil economy in May. The latest expansion in output was the quickest since December 2017.
"Saudi Arabia's non-oil sector continued to enjoy a strong recovery in May, led by a sharp rise in output," David Owen, an economist at IHS Markit, said. "Firms often cited growth in new business and a notable pick up in export sales."
Firms surveyed in the kingdom attributed a rise in customer orders to improved market conditions following looser pandemic-related restrictions. Export orders also rose to the highest level since the end of 2015 as global demand strengthened.
To meet the rising demand, businesses in the kingdom increased inputs for the eighth successive month in May, with the rate of growth quickening to a 17-month high.
"Most firms continued to operate with unchanged workforce numbers, suggesting a focus on boosting productivity back to pre-Covid levels," Mr Owen said. "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."
Business sentiment in the kingdom jumped to the highest level in three months, as firms were hopeful of a further recovery from the pandemic.
The IHS Markit UAE PMI posted 52.3 in May, pointing to a moderate improvement in business conditions and the sixth in as many months. The index was down slightly from 52.7 in April, however, the overall growth was still the second-fastest since August 2019.
The latest data pointed to solid expansions in output and new business in May. New orders rose with improving domestic sales on the back of rising confidence surrounding the Covid-19 pandemic.
Business activity in the UAE was scaled up in May to accommodate for the overall rise in sales.
The non-oil private sector showed further signs of improvement in May, with new orders largely supported by domestic sales, Mr Owen said.
The employment number fell slightly in the May, but with backlogs rising and demand strengthening, "it is hoped that businesses will start to raise their staffing levels soon to support overall growth," he added.
Expectations of a rise in businesses activity in the UAE over the next 12 months amid continued recovery from Covid-19, boosted business sentiment in May for the sixth month on a trot to the highest level since July 2020.
Saudi Arabia's non-oil sector continued to enjoy a strong recovery in May, led by a sharp rise in output
Both Saudi Arabia and the UAE have eased pandemic-related restrictions as they continue their Covid-19 vaccination programmes at speed.
The UAE has administered more than 13.1 million doses of vaccines, enough to vaccinate almost 61 per cent of the country's population. In Saudi Arabia, 14.5 million shots have been administered, enough for more than 21 per cent of the kingdom's population, according to Bloomberg's vaccine tracker.
Egypt's PMI rose to 48.6 in May from 47.7 in April, underpinning a sixth consecutive monthly decline in the health of the non-oil sector, led by decreases in output and new business.
The overall drop in business output in the Arab world's third largest economy was the softest recorded since February, and firms surveyed were more confident about future output, as business sentiment rose to strongest level in more than three years.
Despite remaining in contraction territory Egypt's PMI is "a slight step towards stability," Mr Owen said.
"Business expectations data offered a glimpse of a positive future, as firms were at their most optimistic since early 2018 and expectant of a strong recovery in business conditions to follow soon."
World Sevens Series standing after Dubai
1. South Africa
2. New Zealand
3. England
4. Fiji
5. Australia
6. Samoa
7. Kenya
8. Scotland
9. France
10. Spain
11. Argentina
12. Canada
13. Wales
14. Uganda
15. United States
16. Russia
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How to report a beggar
Abu Dhabi – Call 999 or 8002626 (Aman Service)
Dubai – Call 800243
Sharjah – Call 065632222
Ras Al Khaimah - Call 072053372
Ajman – Call 067401616
Umm Al Quwain – Call 999
Fujairah - Call 092051100 or 092224411
Emergency
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The Vile
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The biog
Job: Fitness entrepreneur, body-builder and trainer
Favourite superhero: Batman
Favourite quote: We must become the change we want to see, by Mahatma Gandhi.
Favourite car: Lamborghini
Oscars in the UAE
The 90th Academy Awards will be aired in the UAE from 3.30am on Monday, March 5 on OSN, with the ceremony starting at 5am
Springsteen: Deliver Me from Nowhere
Director: Scott Cooper
Starring: Jeremy Allen White, Odessa Young, Jeremy Strong
Rating: 4/5
World record transfers
1. Kylian Mbappe - to Real Madrid in 2017/18 - €180 million (Dh770.4m - if a deal goes through)
2. Paul Pogba - to Manchester United in 2016/17 - €105m
3. Gareth Bale - to Real Madrid in 2013/14 - €101m
4. Cristiano Ronaldo - to Real Madrid in 2009/10 - €94m
5. Gonzalo Higuain - to Juventus in 2016/17 - €90m
6. Neymar - to Barcelona in 2013/14 - €88.2m
7. Romelu Lukaku - to Manchester United in 2017/18 - €84.7m
8. Luis Suarez - to Barcelona in 2014/15 - €81.72m
9. Angel di Maria - to Manchester United in 2014/15 - €75m
10. James Rodriguez - to Real Madrid in 2014/15 - €75m
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
How much do leading UAE’s UK curriculum schools charge for Year 6?
- Nord Anglia International School (Dubai) – Dh85,032
- Kings School Al Barsha (Dubai) – Dh71,905
- Brighton College Abu Dhabi - Dh68,560
- Jumeirah English Speaking School (Dubai) – Dh59,728
- Gems Wellington International School – Dubai Branch – Dh58,488
- The British School Al Khubairat (Abu Dhabi) - Dh54,170
- Dubai English Speaking School – Dh51,269
*Annual tuition fees covering the 2024/2025 academic year
Wicked: For Good
Director: Jon M Chu
Starring: Ariana Grande, Cynthia Erivo, Jonathan Bailey, Jeff Goldblum, Michelle Yeoh, Ethan Slater
Rating: 4/5
Specs
Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
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Bert van Marwijk factfile
Born: May 19 1952
Place of birth: Deventer, Netherlands
Playing position: Midfielder
Teams managed:
1998-2000 Fortuna Sittard
2000-2004 Feyenoord
2004-2006 Borussia Dortmund
2007-2008 Feyenoord
2008-2012 Netherlands
2013-2014 Hamburg
2015-2017 Saudi Arabia
2018 Australia
Major honours (manager):
2001/02 Uefa Cup, Feyenoord
2007/08 KNVB Cup, Feyenoord
World Cup runner-up, Netherlands
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Zakat: an Arabic word meaning ‘to cleanse’ or ‘purification’.
Nisab: the minimum amount that a Muslim must have before being obliged to pay zakat. Traditionally, the nisab threshold was 87.48 grams of gold, or 612.36 grams of silver. The monetary value of the nisab therefore varies by current prices and currencies.
Zakat Al Mal: the ‘cleansing’ of wealth, as one of the five pillars of Islam; a spiritual duty for all Muslims meeting the ‘nisab’ wealth criteria in a lunar year, to pay 2.5 per cent of their wealth in alms to the deserving and needy.
Zakat Al Fitr: a donation to charity given during Ramadan, before Eid Al Fitr, in the form of food. Every adult Muslim who possesses food in excess of the needs of themselves and their family must pay two qadahs (an old measure just over 2 kilograms) of flour, wheat, barley or rice from each person in a household, as a minimum.
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AT4 Ultimate, as tested
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Our legal consultant
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Future markets: Saudi Arabia, potentially Kuwait and other GCC countries
