Saudi non-oil business growth accelerates
Riyadh, August 5, 2014
Growth in Saudi Arabia's non-oil business activity accelerated in July to its fastest level since September 2012, while growth in the UAE's non-oil private sector edged down in the month but remained very high by historical standards, a purchasing managers' survey showed.
The Saudi growth was boosted by strong output and new orders, the survey showed.
The seasonally adjusted SABB HSBC Saudi Arabia Purchasing Managers Index rose to 60.1 points last month from 59.2 points in June, on a scale where the 50-point level separates expansion of activity from contraction.
The sub-index for output, at 65.3 points, was the highest since February 2012, while the new orders sub-index was the highest since September 2013.
The survey's authors said companies that participated cited rising numbers of new projects and good market conditions for July's rapid growth in activity.
However, capacity constraints were evident in a rise in the sub-index for backlogs of work, which at 55.6 points was the highest since the survey began in August 2009.
The rates of inflation of purchase costs, staff costs and overall input prices accelerated in July from June, as did growth in output prices, the survey showed.
The UAE index, which measures the performance of the manufacturing and services sectors, was at 58.0 points last month, down from 58.2 points in June.
It stayed close to a peak of 58.3 points hit in April, which was the highest level since the survey was launched in August 2009.
"It's another very strong number for a UAE economy that's still in the sweet spot. Prices are stable, growth is good and high readings for new orders show demand still building momentum," said Simon Williams, chief economist for the Middle East and North Africa at HSBC.
Output growth dropped to 61.6 points in July from 63.3 points in the previous month, while new orders growth fell more moderately. Employment growth slowed slightly but stayed comfortably in positive territory.
Input price inflation edged down to 55.0 points while output price growth increased slightly but was still negative at 49.5 points. - Reuters