Saudi private sector rebounds with growth at 10-month high

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Updated 04 December 2020

Saudi private sector rebounds with growth at 10-month high

  • Steep rise in sales and growing business confidence spark jump in purchasing, hiring activity

RIYADH: Business activity in Saudi Arabia has risen to its highest level since January this year, showing the Kingdom’s economy is beginning to overcome the worst effects of the coronavirus pandemic.

According to IHS Markit’s Purchasing Managers’ Index (PMI) Survey, the acceleration of output growth in the Saudi economy in November was driven by a steep rise in sales and strengthening business confidence.

The survey found that input purchasing rose, while employment growth also returned for the first time since January. Input cost inflation also quickened, leading to a stronger increase in average output charges.

The index has now registered above the 50.0 no-change mark for three months in a row, highlighting a sustained recovery after the economic downturn due to the pandemic.

The Saudi PMI rose to 54.7 in November from 51 the previous month — the strongest improvement since January. The indices vary between 0 and 100, with a reading above 50 indicating an overall increase compared with the previous month, and below 50 an overall decrease.

Both domestic and foreign sales rose last month, marking only the second upturn in new export orders since February.

Business confidence for the year ahead also improved notably during the month. In particular, firms were encouraged by the Saudi government’s easing of lockdown curbs and news of a breakthrough in the development of a vaccine.

Accelerated rises in output and new orders led Saudi firms to sharply expand purchasing activity during November. In addition, hiring activity turned positive and a number of companies linked increased employment to rising demand.

Commenting on the latest survey, David Owen, an economist at IHS Markit, said: “A third successive rise in the Saudi Arabia PMI pointed to an economy getting back on its feet in November. Supported by output and new business growth reaching 10-month highs, the data suggests a strong end to the year for the non-oil private sector. Notably, employment started to rise, while business confidence strengthened in the wake of encouraging vaccine news and sharper demand growth.”

Saudi economist and financial analyst Talat Zaki Hafiz told Arab News: “The improvement is due to many factors, such as the reopening of the market with the ease in lockdown and, finally, the lifting of the curfew. The return to normality has had a significant impact on private sector performance.”

Hafiz added: “Things will get much better by the next year. We have also noticed an improvement in oil prices recently and this will improve things significantly.”


Emirates stops flights to three major Australian cities

Updated 16 January 2021

Emirates stops flights to three major Australian cities

  • Flights to/from Sydney, Brisbane and Melbourne will be suspended until further notice: Emirates
  • The airline will still run two flights a week to Perth

DUBAI: Emirates has suspended flights to Australia's three largest cities as the country further restricts international arrivals over fears of new virus strains.
The Dubai-based carrier was one of the last to maintain routes into and out of the country's east coast throughout most of the pandemic but on Friday evening told travellers a handful of planned flights next week would be the last.
"Due to operational reasons, Emirates flights to/from Sydney, Brisbane and Melbourne will be suspended until further notice," Emirates said on its website.
The airline will still run two flights a week to Perth, but the cuts are another barrier for tens of thousands of stranded Australians still attempting to return home.
The Australian government responded by announcing more repatriation flights and said other carriers still flying services to the cities could fill the gap.
"The capacity that Emirates was able to use within the cap will be allocated to other airlines, ensuring that there are still as many tickets, as many seats available into Australia," Finance Minister Simon Birmingham said.
A small number of airlines - including Qatar Airways and Singapore Airlines - are still running services to Australia but local media were already reporting delays and cancellations among returning travellers.
Australia's borders have effectively been closed since March to curb the spread of the virus, with the government even limiting the number of citizens allowed to return.
Last week travel restrictions were further tightened, with arrival numbers slashed and all travellers into the country requiring a negative Covid-19 test before flying.
In making the changes, Prime Minister Scott Morrison cited a growing number of people in quarantine testing positive for new strains of Covid-19.
Fears that a variant of the virus from Britain, believed to be more contagious, had leaked into Brisbane from hotel quarantine triggered a snap lockdown in the city last week.
"There are many unknowns and uncertainties in relation to the new strain, and so that's why this precautionary approach, we believe, is very sensible," Morrison said.
Australia continues to deal relatively well with the virus, having recorded about 28,600 cases and 909 deaths linked to Covid-19 in a population of 25 million.