Business activity in the non-oil private sector economy of Saudi Arabia continued to improve in September as output and new orders rose sharply on robust demand, despite inflation concerns and global macroeconomic headwinds.
The kingdom's seasonally adjusted S&P Global purchasing managers’ index reading stood at 56.6 in September. Although down from 57.7 in August, the headline PMI reading signalled an improvement in the health of the country's non-oil private sector economy for the 25th successive month.
A reading above the neutral level of 50 indicates growth while one below it points to a contraction.
“Saudi Arabia's non-oil private sector economy retained an impressive pace of growth during September, especially against the backdrop of increasingly challenging global economic conditions,” said David Owen, an economist at S&P Global Market Intelligence.
“Both output and new orders rose at rates above their averages for their current 25-month growth sequences.”
Output and new orders, two key components of the headline PMI, remained firmly inside the positive territory in September and maintained a robust pace of expansion.
Businesses surveyed underscored the “positive interaction between demand and production” that helped orders to rise at the end of the third quarter and drove overall output higher.
Sales and production also rose for the 25th consecutive month, with sector data indicating broadly consistent gains across the non-oil private sector economy, according to the survey.
“Confidence in the quality of goods and services … meant firms expect to successfully convert into hard contract wins a high proportion of what is an extremely positive pipeline of new business,” Mr Owen said.
The sustained improvement in production and demand drove purchasing activity. Growth was marked, albeit down on August's seven-year high, as business sought to maintain inventory levels at a time of high “current and expected sales demand”.
The latest data indicates continued job creation in the kingdom's non-oil private sector economy, though at a slower pace as work backlogs fell for a fourth month in a row.
Although marginal, the growth in employment marked the sixth consecutive month of increase in staffing levels.
Businesses surveyed “retained a high degree of confidence” for continued rise in production levels over the next 12 months. The upbeat sentiment was driven by expectations of a continued strong sales and a strong pipeline of new work despite global macroeconomic headwinds and inflationary pressures.
Saudi Arabia’s economy grew by 12.2 per cent in the second quarter, exceeding initial estimates and registering the fastest expansion in more than a decade on the back of higher oil prices.
The annualised real gross domestic product growth in three months to the end of June was the quickest since the third quarter of 2011, the kingdom’s General Authority for Statistics (Gastat) said last month.
Oil-related economic activity in Saudi Arabia, Opec’s biggest crude producer, jumped by about 23 per cent on an annual basis in the second quarter. Non-oil economic activity rose 8.2 per cent, revised higher by Gastat from its 5.4 per cent flash estimates.
The kingdom's economy is set to grow at the quickest pace in a decade and could be one of the world’s fastest-growing economies this year, the International Monetary Fund said in August.
Saudi Arabia’s GDP is forecast to expand 7.6 per cent this year after 3.2 per cent growth in 2021, the IMF said in its World Economic Outlook update in July. The kingdom's non-oil growth will increase to 4.2 per cent in 2022 before returning to its medium-term potential of 4 per cent.
Saudi investment bank Jadwa Investment forecasts the kingdom's economy will grow 8.7 per cent this year after its economy showed strong expansion in both oil and non-oil activities in the first half of 2022.
In its latest Interim Economic Outlook released last week, the Organisation for Economic Co-operation and Development (OECD) projects the kingdom's economy may expand as much as 9.9 per cent this year.
September's PMI data shows that the kingdom's non-oil private sector businesses recorded another month of solid input price inflation. Staffing costs increased, but only marginally and at the slowest rate since June, while construction companies reported by far the biggest rise in costs in September.
Purchasing cost inflation was the principal driver of higher overall operating expenses, as prices of globally-sourced raw materials and oil-related products rose again, according to the survey.
Inflation in Saudi Arabia has stayed low, compared with most advanced economies, amid a rise in per capita income.
GDP per capita in the kingdom surged in the April to June quarter, rising 44.6 per cent on an annual basis to 29,819 Saudi riyals ($7,941), according to Gastat.
The IMF expects inflation to remain contained at 2.8 per cent in 2022 as the kingdom’s central bank tightens policy in line with the US Federal Reserve.
Consumer prices in Saudi Arabia increased by 3 per cent on an annualised basis, higher than the 2.7 per cent rate of inflation recorded in August, Gastat said. They are markedly lower than multi-decade inflation rates in OECD countries.
Meanwhile, business activity in Egypt's non-oil private sector economy remained under pressure from inflation, energy rationing, import restrictions and weak demand at the end of the third quarter.
Egypt's PMI index reading in September was pegged to its August level of 47.6, its joint-weakest performance in seven months.
“Non-oil activity in Egypt continued to suffer from weak demand, geopolitical tensions and surging inflation in the final month of the third quarter,” Shreeya Patel, an economist at S&P Global Market Intelligence, said.
“The energy crisis — brought about by Russia's war on Ukraine — led to sharp uplifts in energy costs and the introduction of energy rationing policies.”
Unfavourable pound-dollar exchange rate movements also added to “already steep price pressures”, she added.
UAE currency: the story behind the money in your pockets
Ziina users can donate to relief efforts in Beirut
Ziina users will be able to use the app to help relief efforts in Beirut, which has been left reeling after an August blast caused an estimated $15 billion in damage and left thousands homeless. Ziina has partnered with the United Nations High Commissioner for Refugees to raise money for the Lebanese capital, co-founder Faisal Toukan says. “As of October 1, the UNHCR has the first certified badge on Ziina and is automatically part of user's top friends' list during this campaign. Users can now donate any amount to the Beirut relief with two clicks. The money raised will go towards rebuilding houses for the families that were impacted by the explosion.”
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
The schedule
December 5 - 23: Shooting competition, Al Dhafra Shooting Club
December 9 - 24: Handicrafts competition, from 4pm until 10pm, Heritage Souq
December 11 - 20: Dates competition, from 4pm
December 12 - 20: Sour milk competition
December 13: Falcon beauty competition
December 14 and 20: Saluki races
December 15: Arabian horse races, from 4pm
December 16 - 19: Falconry competition
December 18: Camel milk competition, from 7.30 - 9.30 am
December 20 and 21: Sheep beauty competition, from 10am
December 22: The best herd of 30 camels
DMZ facts
- The DMZ was created as a buffer after the 1950-53 Korean War.
- It runs 248 kilometers across the Korean Peninsula and is 4km wide.
- The zone is jointly overseen by the US-led United Nations Command and North Korea.
- It is littered with an estimated 2 million mines, tank traps, razor wire fences and guard posts.
- Donald Trump and Kim Jong-Un met at a building in Panmunjom, where an armistice was signed to stop the Korean War.
- Panmunjom is 52km north of the Korean capital Seoul and 147km south of Pyongyang, North Korea’s capital.
- Former US president Bill Clinton visited Panmunjom in 1993, while Ronald Reagan visited the DMZ in 1983, George W. Bush in 2002 and Barack Obama visited a nearby military camp in 2012.
- Mr Trump planned to visit in November 2017, but heavy fog that prevented his helicopter from landing.
Dhadak 2
Director: Shazia Iqbal
Starring: Siddhant Chaturvedi, Triptii Dimri
Rating: 1/5
UAE currency: the story behind the money in your pockets
BULKWHIZ PROFILE
Date started: February 2017
Founders: Amira Rashad (CEO), Yusuf Saber (CTO), Mahmoud Sayedahmed (adviser), Reda Bouraoui (adviser)
Based: Dubai, UAE
Sector: E-commerce
Size: 50 employees
Funding: approximately $6m
Investors: Beco Capital, Enabling Future and Wain in the UAE; China's MSA Capital; 500 Startups; Faith Capital and Savour Ventures in Kuwait
It’ll be summer in the city as car show tries to move with the times
If 2008 was the year that rocked Detroit, 2019 will be when Motor City gives its annual car extravaganza a revamp that aims to move with the times.
A major change is that this week's North American International Auto Show will be the last to be held in January, after which the event will switch to June.
The new date, organisers said, will allow exhibitors to move vehicles and activities outside the Cobo Center's halls and into other city venues, unencumbered by cold January weather, exemplified this week by snow and ice.
In a market in which trends can easily be outpaced beyond one event, the need to do so was probably exacerbated by the decision of Germany's big three carmakers – BMW, Mercedes-Benz and Audi – to skip the auto show this year.
The show has long allowed car enthusiasts to sit behind the wheel of the latest models at the start of the calendar year but a more fluid car market in an online world has made sales less seasonal.
Similarly, everyday technology seems to be catching up on those whose job it is to get behind microphones and try and tempt the visiting public into making a purchase.
Although sparkly announcers clasp iPads and outline the technical gadgetry hidden beneath bonnets, people's obsession with their own smartphones often appeared to offer a more tempting distraction.
“It's maddening,” said one such worker at Nissan's stand.
The absence of some pizzazz, as well as top marques, was also noted by patrons.
“It looks like there are a few less cars this year,” one annual attendee said of this year's exhibitors.
“I can't help but think it's easier to stay at home than to brave the snow and come here.”
From Zero
Artist: Linkin Park
Label: Warner Records
Number of tracks: 11
Rating: 4/5
The bio
Favourite food: Japanese
Favourite car: Lamborghini
Favourite hobby: Football
Favourite quote: If your dreams don’t scare you, they are not big enough
Favourite country: UAE
The%20specs%20
%3Cp%3E%3Cstrong%3EEngine%3A%20%3C%2Fstrong%3E2.0-litre%204cyl%20turbo%0D%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E261hp%20at%205%2C500rpm%0D%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E400Nm%20at%201%2C750-4%2C000rpm%0D%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3E7-speed%20dual-clutch%20auto%0D%3Cbr%3E%3Cstrong%3EFuel%20consumption%3A%20%3C%2Fstrong%3E10.5L%2F100km%0D%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3ENow%0D%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3EFrom%20Dh129%2C999%20(VX%20Luxury)%3B%20from%20Dh149%2C999%20(VX%20Black%20Gold)%3C%2Fp%3E%0A
THE BIO
Bio Box
Role Model: Sheikh Zayed, God bless his soul
Favorite book: Zayed Biography of the leader
Favorite quote: To be or not to be, that is the question, from William Shakespeare's Hamlet
Favorite food: seafood
Favorite place to travel: Lebanon
Favorite movie: Braveheart
DUBAI CARNIVAL RESULTS
6.30pm Handicap US$135,000 (Turf) 2,410m
Winner Dubai Future, Harry Bentley (jockey), Saeed bin Suroor (trainer).
7.05pm UAE 1000 Guineas Listed $250,000 (Dirt) 1,600m
Winner Dubai Love, Patrick Cosgrave, Saeed bin Suroor.
7.40pm Dubai Dash Listed $175,000 (T) 1,000m
Winner: Equilateral, James Doyle, Charles Hills.
8.15pm Al Bastakiya Trial Conditions $100,000 (D) 1.900m
Winner Laser Show, Kevin Stott, Saeed bin Suroor.
8.50pm Al Fahidi Fort Group Two $250,000 (T) 1,400m
Winner Glorious Journey, James Doyle, Charlie Appleby.
9.25pm Handicap $135,000 (D) 2,000m
Winner George Villiers, Tadhg O’Shea, Satish Seemar.
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
The specs
Engine 60kwh FWD
Battery Rimac 120kwh Lithium Nickel Manganese Cobalt Oxide (LiNiMnCoO2) chemistry
Power 204hp Torque 360Nm
Price, base / as tested Dh174,500
Padmaavat
Director: Sanjay Leela Bhansali
Starring: Ranveer Singh, Deepika Padukone, Shahid Kapoor, Jim Sarbh
3.5/5
Our legal consultants
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
