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July Brings Prosperity to the Gulf as New Orders Increase in Saudi Arabia and Dubai Sees 16.4 Percent Rise in Exports

Middle East : 10 August 2012

Report Covers GCC Economic Conditions for July

Economies in the GCC continue to expand, supported by fiscal policies, large infrastructure projects and growing gas and oil exports, according to a recent report. The specialized report released by Gulf Investment Corporation stated that member economies have seen marked rises in domestic and foreign investments by both public and private sector sources.

The execution of massive projects with key sectors like power, infrastructure, transportation and industry have driven economic growth, as has increases in the tourism sector.

Monetary and economic policies have been implemented by GCC states in order to counter the shocks within local and worldwide economies. These policies played a role in the increases and development seen in the GCC economy.

The region remains flexible in terms of dealing with the Euro Zone and has learned to avoid spending beyond the budget during tough times. Policies also direct resources into channels of productive investment.

The report indicated that July’s increase in S&P’s Index for Gulf stock figure was mainly due to positive performance in various GCC markets, including those in the UAE, Saudi Arabia and Qatar. S&P’s figure rose from a 4% decline in June to a 1.65% increase in July.

Markets in Kuwait displayed weaker performance levels due to political uncertainty and disappointing figures for the NBK.

Higher Orders in Saudi Arabian Private Sector

Results from SABB’s recent HSBC Saudi Arabia PMI for July 2012 cover the performance of non-oil companies operating within Saudi Arabia’s private sector. This report uses output figures, prices, employment figures, stocks and orders within the calculations.

Data for July indicated that this portion of the Kingdom’s economy is expanding at a slower rate. New orders and output have grown, but at weakened rates and job creation remains unchanged since the last period. Output and input price inflation rates remained low.

Business conditions faced by Saudi private firms improved throughout July, with the PMI coming in at 58.1.

Levels of output and new orders were marked, but rose at slightly slower rates. More companies added to their staffing in response to these new orders.

Private sector companies in the Kingdom reported that July brought more new orders coming from global clients. This indicates continued expansion was partially driven by Saudi’s domestic economy.

Work backlogs decreased in July, a direction not seen since September 2011 and rarely experienced in the last thirty-month period. However, this decline was actual marginal overall.

Pre-production levels of inventory and purchasing activities within Saudi non-hydrocarbon private sector business have grown at slower rates over July, keeping time with new business and activity trends. Delivery times for suppliers continued to shrink, and decreased at a rate not seen since April. Shorter lead times were a result of vendor competition, demands of the buyer and improvements in payments, according to survey respondents.

Inflation rates in input prices slowed through July, reaching the slowest rates seen since last December and resulting from slow growth in labor costs and purchase prices. On average, wages and salaries moved only slightly higher in July. Output price inflation fell to a low not seen in seven months, hitting a modest level when taken alongside historic trends.

Members of Dubai CCI Report 16.4 Percent Growth for July

The Dubai Chamber of Commerce and Industry (or DCCI) hosted the Business Networking Suhour earlier this week. The event, held at the Dubai World Trade Center, was in line with the Chamber’s commitment to improve networking for the wide group of stakeholders in the region.

HE Abdul Rahman Saif Al Ghurair attended the Business Network Suhour, where growth in Dubai was attributed to partnerships between public and private sectors. Many other major players in local groups and business councils also attended.

Al Ghurair addressed the attendees and noted DCCI’s dedication to economic growth enhancement through business community support. His Excellency stated that new initiatives targeting vital emerging markets help in this regard. He also mentioned the two new overseas offices of the DCCI, set to open by the end of 2012 in Ethiopia and Azerbaijan.

Al Ghurair also noted that the DCCI has seen a 30 percent increase in new member enrollment during the first six month of this year, compared to the amount added in the first half of 2011.

According to DCCI data, the exports and re-exports of Chamber members grew by 16.4 percent (year-on-year). Month-on-month numbers, when compared to 2011, indicated 7.6 percent growth. Member exporters reach 170 markets around the world.

More certificates of origin were also issued in July, 8.7 percent more than July of last year. Al Ghurair stated that these figures indicate a promising start to the year.

The Dubai Chamber has participated in 32 events across the globe, occurring in 24 cities found in 19 nations and including the Surat in India and the famous Consumer Electronics Show in the United States.

Preparations are being made to move ahead with trade missions in markets such as Azerbaijan, with a satellite office opening there and a push to expand trade and investments between Dubai and the Caucasus and Central Asia.

DCCI will have a presence at SMM Hamburg, a key trade fair in the global maritime industry. Member hope that this event will help to trigger new developments throughout the maritime industry in Dubai, improving the amount of partnerships within the sector.

Paul Holdsworth, Staff Writer, Gulf Jobs Market News
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