Saudi non-oil economy grows to its highest so far this year

Saudi Arabia’s non-oil sector grew at its fastest pace so far this year, on the back of an upturn in output and new order growth, according to an index compiled by Emirates NBD and IHS Markit.

The seasonal headline Purchasing Managers' Index – an indication of the operational health of the non-oil private sector economy – rose to 55 in June, up from 53.2 the previous month, according to the survey.

"Firms had been anticipating this for several months, as reflected in the very strong ‘future output’ readings since February," said Emirates NBD Mena research head Khatija Haque. "It isn’t surprising then that the future output index declined sharply in June, with most firms now expecting their output to be relatively stable over the next 12 months,”

Saudi Arabia, the biggest economy in the Middle East, is on a rebound this year, buoyed by a recovery in oil prices in the first half of the year. GDP for the first quarter grew 1.2 per cent. The non-oil economy, meanwhile, grew 1.6 per cent for the same period, compared with 1.3 per cent in the previous quarter, according to government data.

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UAE, Saudi PMI fortunes diverge in April

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A PMI reading above 50 indicates expansion, and below indicates contraction. The Saudi reading pointed to a marked improvement in business conditions, although the figure was below the average registered when the survey began in August 2009.

Output growth accelerated in the second quarter – at the highest rate since December – noted the survey. New orders in the kingdom also improved at the fastest rate in six months for June, with business sourced from both domestic and foreign sources.

The survey noted that foreign business growth had returned for the first time since January.

Backlogs of work increased at the fastest pace in 11 months in June, reflecting higher inflows of orders and built-up capacity pressures in the non-oil sector.

In spite of the growth in orders, job creation remained essentially flat, rising only fractionally above figures registered in May. New hires remained at a rate below historical average, noted the survey.

Input price pressures faced by Saudi companies also increased at their fastest pace in four months in June, which could be attributed to rising raw material prices and higher cost burdens.

Optimism for future growth prospects appear to have eased to a nine-month low, the survey reported, with weaker growth anticipated.

COMPANY%20PROFILE

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COMPANY PROFILE

Name: Kumulus Water

Started: 2021

Founders: Iheb Triki and Mohamed Ali Abid

Based: Tunisia

Sector: Water technology

Number of staff: 22

Investment raised: $4 million

At a glance

Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.

Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year

Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month

Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30

Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse

Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth

Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances

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Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)

Power: 333hp, 449hp, 680hp

Torque: 480Nm, 670Nm, 870Nm

On sale: Later in 2025 or early 2026, depending on region

Price: Exact regional pricing TBA

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Rating: 3/5

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Some 400,000 shrubs and 13,000 trees in the on-site nursery

An additional 450,000 shrubs and 4,000 trees to be delivered in the months leading up to the expo

Ghaf, date palm, acacia arabica, acacia tortilis, vitex or sage, techoma and the salvadora are just some heat tolerant native plants in the nursery

Approximately 340 species of shrubs and trees selected for diverse landscape

The nursery team works exclusively with organic fertilisers and pesticides

All shrubs and trees supplied by Dubai Municipality

Most sourced from farms, nurseries across the country

Plants and trees are re-potted when they arrive at nursery to give them room to grow

Some mature trees are in open areas or planted within the expo site

Green waste is recycled as compost

Treated sewage effluent supplied by Dubai Municipality is used to meet the majority of the nursery’s irrigation needs

Construction workforce peaked at 40,000 workers

About 65,000 people have signed up to volunteer

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Expo 2020 Dubai to open in October 2020 and run for six months

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Skewed figures

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