Saudi business confidence strongest in 5 years: Emirates NBD

Saudi Arabia’s business confidence towards future growth prospects in the coming 12 months improved to the highest in five years, according to the latest survey by Emirates NBD released on Thursday.

Firms in the Kingdom reported hopes of a sustained improvement in market conditions, and foresee new products, competitive pricing and greater market activity leading to output growth, said the survey that contains original data collected from a monthly survey of business conditions in the Saudi Arabian private sector.

“Business optimism remains strong in Saudi Arabia, and the future output index climbed to the highest reading in five years. 53.8% of respondents expect that output will be higher in 12 months’ time, with no firm expecting a deterioration in conditions,” Daniel Richards, MENA Economist at Emirates NBD, said.

The headline Emirates NBD Saudi Arabia Purchasing Managers’ Index (PMI) however fell to 54.5 in December from 55.2 in November, the survey showed.

Nevertheless, while output dipped from its recent peak in November, it remained comfortably above the 2018 average of 57.6, coming in at 58.2, the survey added.

While underlying market conditions were reported to have improved, the survey continued to point to strong competitive pressures across the private sector and, on average, firms reduced selling prices in order to help support sales, the statement said.

Though only slight, December’s decrease in average output charges was more marked than that seen in the penultimate month of the year.

There was a small squeeze on margins as firms reported slight increases in both purchase prices and staff pay, though costs pressures in general were muted by historical standards.