Trade Surplus in Kuwait Hits 6.6bn in Third Quarter
A slight increase in third quarter results pushed Kuwait’s trade surplus to KD 6.6bn, a level below the record high results of KD 7.2bn achieved in the first quarter. As oil exports remained robust and imports weakened, the third quarter trade surplus hit 13 percent of last year’s annual GDP. Future increases in the trade surplus will feel the limitations of declining oil prices and a rise in imports resulting from growth in the non oil sector.
Revenue from oil exports rose from KD 7.7bn in the second quarter to KD 7.8bn in Q3, with a year-on-year increase of around 13 percent.
These results are higher than expectations, given that crude production was up 9 percent and prices for exported Kuwaiti crude dropped by 0.3 percent over the same timeframe. As oil markets weaken along with oil prices, revenues are expected to decline in the coming year.
Non oil exports were down from KD 0.6bn to KD 0.5bn in the third quarter. Lower receipt levels in re-exports drove this figure down despite higher exports levels for ethylene products and fertilizers. In terms of y-o-y figures, non oil exports rose by 13 percent.
Import levels continue to decline, dropping under KD 1.8bn in the third quarter after a record high of KD 2.0bn was reached in the fourth quarter of 2011. Annual import growth dropped to just 2 percent during the third quarter, the slowest rate since 2009. Activity in the domestic economy may have weakened imports, but that trend could reverse this year as the Kuwaiti government’s development plan is implemented.
Saudi Consumers Enjoy High Level of Optimism In Regards to Personal Finances
Consumers in Saudi Arabia remain optimistic, as 33 percent of survey respondents expect to experience an improved state of personal finances, according to a recent survey by Credit Suisse Research Institute.
Optimism levels have declined slightly over last year’s findings, and the recent results have highlighted a contrast found between the kingdom’s wealthy and poor. The survey found that although 56 percent of wealthy respondents forecast improvements in their finances, less than half of those were in the lower portion of that demographic.
Public sector wages rose in 2011, as government worker minimum wage almost quadrupled to match the private sector figure. Social provisions and job creation coincided with this increase and created a buoyant consumer climate with low to middle-class earners more optimistic. The report noted that this momentum has slowed and optimism is beginning to slip.
Also, the recent report noted a forecast of income growth, but more so for those currently at the higher levels. High ticket spending has increased as a result, while low ticket spending, on items such as dairy and food, has remained low.
Credit Suisse noted that a massive structural opportunity presents itself to the financial industry, with savings increasing across the kingdom. Most savers are sticking with bank accounts and cash, according to the Credit Suisse.
This report surveyed more than 3.3 billion consumers from around the world, including those in Brazil, China, India, Indonesia, Russia, Saudi Arabia, South Africa and Turkey. Focusing on consumers within the emerging world, this survey aims to offer businesses valuable information regarding the drivers of optimism and the spending preferences of those involved.
In general terms, consumer confidence has improved but continues to present contrasts, according to the Credit Suisse report.
Hiring Plans in 27 Percent of Dubai Companies
Business confidence has risen in Dubai companies. As investor confidence comes back and activity in core economic sectors soars, 27 percent of firms in Dubai plan to hire during the first quarter of this year.
Dubai’s Business Confidence Index hit 135.9 points during the fourth quarter of 2012, representing an increase of 10.8 percent over the previous quarter and 2 percent higher than Q4 of 2011.
Optimism reigned as 94 percent of participating companies forecasted steady or increased sales for the coming year. The DED’s quarterly business survey ran from October to December of last year.
A positive business outlook has also led to more hiring plans, with 27 percent of companies expecting to expand their staff during the opening quarter of this year. Seventy one percent of companies surveyed reported that staffing levels will remain stable.
Sentiment around Dubai indicates steady economic growth headed for sustainable levels. Growing levels of confidence within key economic sectors and stronger macroeconomic essentials are resulting in market stimulation and job growth throughout Dubai, according to DED Director General Sami Al Qamzi.
Revenue, sales volume and profits remain buoyant in a wide range of sectors, with 66 percent of businesses expecting higher sales and 61 percent forecasting greater profits in Q1 2013. In terms of pricing, 82 percent forecast stable prices. This indicates that revenue increases will result from higher levels of business activity.
Expectations run high in trading companies, with services and manufacturing businesses following suit. Demand resulting from the Dubai Shopping Festival has fuelled optimism and 60 percent of businesses surveyed indicate plans to boost purchase orders during the first quarter of this year, in an effort to meet increased demand.
A rebound has also been noted in construction, with new projects and restarted projects coming online. This increase is also reflected in the manufacturing sector, with glass and cement manufacturers in particular.
Sales in the services sector are also expected to increase, as greater demand, market expansions and another tourist season spreads across the economy into car rental, travel, advertising and architecture companies around Dubai.
Larger companies and SMEs face similar challenges this quarter, namely increased competition, rising lease costs, higher utility bills and the ever-present business regulations.
Despite the challenges, 65 percent of Dubai companies surveyed have plans to expand in the opening quarter of this year, which represents a significant boost from the 29 percent that reported expansion plans in the previous quarter.
Around 46 percent of surveyed firms expect to invest in technology, up from just 23 percent reported in the fourth quarter of 2012.Paul Holdsworth, Staff Writer, Gulf Jobs Market News