Latest news with #David Owen
Zawya
7 days ago
- Business
- Zawya
UAE's PMI slips to lowest level in four years over geopolitical tensions
Geopolitical headwinds continued to weigh on non-oil activity in the UAE, with July's Purchasing Managers' Index (PMI) slipping to its lowest level in four years. The seasonally adjusted S&P Global UAE dropped more than a point to 52.9 in July, down from the previous month's 53.5, implying the rate of growth was softer than the survey's long-run trend. The survey signalled the weakest growth in non-oil business conditions since June 2021, as regional tensions continued to weigh on sales. A further slowdown in new business growth made some clients hesitant to commit to new spending, the report said. Hiring and purchasing growth also suffered, while output expanded sharply as firms sought to prevent further increases in backlogs of work. Additionally, a quicker rate of cost inflation led to a fresh rise in average prices charged. Despite higher orders compared to June, survey panellists were weighed down by weaker tourism activity and global trade disruptions. 'New order volumes helped firms to expand, but this trend is declining, with the latest data indicating the softest rise in incoming new work in almost four years,' David Owen, Senior Economist at S&P Global Market Intelligence, said. 'While survey members partly link this slowdown to tensions between Iran and Israel, which has made some clients hesitant to spend, there were also many suggesting that markets are becoming more crowded, making it increasingly difficult to secure new orders,' he added. The PMI for July indicated overall increase in output remained strong, with some firms reporting output increased in response to new sales opportunities, rising client incomes, and the clearance of pending work. Employment rose slightly, but marked the weakest uplift in four months, coinciding with a steeper rise in outstanding business. Stocks of inputs fell for the third time in five months, which was partly linked to backlog clearance efforts and some delays in the receipt of supplied items. Higher costs for shipping, raw materials, wages and capital, also weighed on firms, with the overall rise in input prices being the fastest since April. Projections for future activity remained optimistic in July, driven by hopes of strengthening demand levels. However, the degree of confidence eased slightly, as some companies highlighted risks stemming from global economic uncertainty and heightened competition. 'Should regional tensions ease, we may see a recovery in sales growth in the coming months… Nevertheless, the ongoing trends of rising competition, limited inventory, constrained hiring growth and relatively low confidence among surveyed firms suggest that downside risks remain elevated,' Owen added. Dubai PMI The Dubai non-oil private sector rose in July, rising to 53.5 from a 45-month low of 51.8 in June, amid a recovery in demand growth. The survey attributed new orders to the recovery, which indicated a sharper improvement in sales volumes compared to June. Survey participants reported better business conditions and an increase in new client enquiries. As a result, Dubai non-oil firms expanded output at the sharpest rate in five months while continuing efforts to increase employment and inventories. The survey indicated that although input costs rose at the fastest pace since April, overall inflationary pressures remained relatively modest. Consequently, non-oil firms raised their selling prices at the slowest rate in eight months. (Writing by Bindu Rai, editing by Brinda Darasha)
Zawya
7 days ago
- Business
- Zawya
Egypt's non-oil sector shows signs of stability as PMI nears growth threshold
Egypt's non-oil private sector showed signs of stabilisation in July, with employment rising for the first time in nine months and a softer decline in output and new orders, according to the latest S&P Global Egypt PMI report. The headline PMI rose to 49.5 in July from 48.8 in June, remaining below the 50.0 threshold that separates growth from contraction. However, the index reached its joint-highest level in five months, suggesting only a marginal decline in business conditions. "Businesses ... had the confidence to hire new staff, leading to an increase in employment for the first time in nine months, if only a fractional one," said David Owen, Senior Economist at S&P Global Market Intelligence. Employment rose as firms responded to signs of stabilising demand and rising backlogs of work. Output and new orders continued to fall, albeit at a softer rate than in June, with some firms noting increased activity amid tentative signs of recovering sales. The wholesale and retail sector remained the largest drag on demand and activity. Input prices rose at a quicker pace, driven by higher costs for items such as cement and fuel, yet remained below the long-run trend. Selling charges increased for the third consecutive month, although the rate of inflation was modest. Despite ongoing challenges, optimism about future activity improved slightly from June's record low, with firms expressing hopes for slower inflation and reduced regional conflict. However, overall confidence remained historically subdued. (Reporting by Reuters)
Reuters
7 days ago
- Business
- Reuters
Egypt's non-oil sector shows signs of stability as PMI nears growth threshold
Aug 5 (Reuters) - Egypt's non-oil private sector showed signs of stabilisation in July, with employment rising for the first time in nine months and a softer decline in output and new orders, according to the latest S&P Global Egypt PMI report. The headline PMI rose to 49.5 in July from 48.8 in June, remaining below the 50.0 threshold that separates growth from contraction. However, the index reached its joint-highest level in five months, suggesting only a marginal decline in business conditions. "Businesses ... had the confidence to hire new staff, leading to an increase in employment for the first time in nine months, if only a fractional one," said David Owen, Senior Economist at S&P Global Market Intelligence. Employment rose as firms responded to signs of stabilising demand and rising backlogs of work. Output and new orders continued to fall, albeit at a softer rate than in June, with some firms noting increased activity amid tentative signs of recovering sales. The wholesale and retail sector remained the largest drag on demand and activity. Input prices rose at a quicker pace, driven by higher costs for items such as cement and fuel, yet remained below the long-run trend. Selling charges increased for the third consecutive month, although the rate of inflation was modest. Despite ongoing challenges, optimism about future activity improved slightly from June's record low, with firms expressing hopes for slower inflation and reduced regional conflict. However, overall confidence remained historically subdued.
Arab News
06-05-2025
- Business
- Arab News
Saudi, Egypt step up investment ties with incentives across key sectors
RIYADH: Egypt's non-oil private sector contracted further in April according to S&P Global, while Lebanon saw its economic decline slow across the month. The north African country's Purchasing Managers' Index hit 48.5 in the period, down from 49.2 in March. This contraction was driven by a reduction in domestic and foreign demand, which caused new orders to fall for the second consecutive month. Any figure below 50 indicates a decline, while above that number shows growth. Lebanon's PMI report, produced by S&P Global in association with BLOMINVEST Bank, showed a rise in April to 49, up from 47.6 in March. Despite this marginal increase, the figure is still lower than earlier this year, when the country registered a healthy reading of 50.6 in January and 50.5 in February. The figures for the countries come as PMI figures across the Middle East and North Africa have generally been reflecting the rapid expansion and growth of private firms. In April, Saudi Arabia's PMI stood at 55.6, while it was 54 in the UAE and 54.2 in Kuwait. Reflecting on Egypt's decline, David Owen, senior economist at S&P Global Market Intelligence, said: 'Business activity weakened for the second month running in April as firms highlighted an additional drag from falling sales.' He added: 'Some companies signalled that weakness in international markets had hit business confidence and spending, amid wider concerns that rising global economic uncertainty and changing trade policy could soften demand across several markets.' Business optimism up in Egypt In January, Egypt's non-oil business activities entered the expansion zone, with the PMI hitting 50.7. It was followed by another healthy month of growth in February, where the PMI stood at 50.1. According to the survey, the rate of contraction of non-energy business activity quickened from March and was the fastest seen in four months. The report revealed that lower levels of activity and new work led non-oil companies to rein in input purchases for a second month in a row. Due to limited business activities, companies in Egypt were also keen to limit headcounts, with the latest data signalling a decline in employment for the third successive month. S&P Global further said that input prices in the country's non-oil economy rose at their fastest pace in four months in April, marking a notable reversal from March, when inflation dropped to a 58-month low. 'Subdued pressure on input costs in recent months helped firms to steady their own prices in April, which should bring some reassurance that inflation headwinds are easing,' said Owen. He added: 'Although input costs rose at a much sharper pace over the month, this was mainly attributed to the roughly 15 percent uplift in fuel prices, rather than underlying inflationary pressures.' Regarding the future outlook, non-oil firms in Egypt expressed more confidence, with optimism ticking up to a three-month high. Firms that expressed future confidence hoped that market conditions at home and abroad would strengthen in the coming months. In February, global credit rating agency Moody's affirmed Egypt's Caa1 long-term foreign and local currency issuer rating with a positive outlook, driven by prospects for improvement in the country's debt service burden. The report said that the positive outlook was given due to the country's strengthening foreign exchange buffers. Moody's awards a Caa1 rating to countries with poor quality and very high credit risks. Private sector activity in Lebanon falls at slower pace According to the latest report, Lebanon's private sector economy remained under pressure at the start of the second quarter, as new orders and business activity shrank. Purchasing activity and stock levels also dipped slightly in April, while firms' expectations for the next 12 months fell into pessimistic territory for the first time since November. 'The BLOM Lebanon PMI recorded 49.0, implying a decline in private sector business activity for the second month in a row, but at a slower pace. This decline was mainly down to the marginal decline in new orders, reflecting weaker export demand,' said Helmi Mrad, senior research analyst at BLOM Bank. The latest study also indicated a reduction in the volume of incoming new business received by private sector companies in Lebanon, due to factors including market conditions, security concerns, regional instability, and weak customer purchasing power. 'The debate regarding the surrendering of Hezbollah's weapons escalated in the last couple of weeks as some of Hezbollah's leaders stated that no one can forcefully remove their weapons. In the meantime, Israel's breaches of the ceasefire agreement continue,' said Mrad. He added: 'This stalemate is having negative effects on business activity in the short-run, despite the progress made on the enactment of laws essential for financial restructuring.' S&P Global also highlighted a fractional decline in employment across the Lebanese private sector at the start of the second quarter.
