Latest news with #economicexpansion
Arab News
2 days ago
- Business
- Arab News
Saudi Arabia's non-oil sector growth continues in May as PMI climbs to 55.8
RIYADH: Saudi Arabia's non-oil private sector registered an improvement in operating conditions in May, as the Riyad Bank Purchasing Managers' Index rose to 55.8, signaling continued economic expansion, a new analysis showed. According to the latest Riyad Bank Saudi Arabia PMI report compiled by S&P Global, the index edged up from 55.6 in April, remaining well above the 50 mark that separates growth from contraction. However, the figure remained below the recent high of 60.5 recorded at the beginning of 2025. The latest data pointed to a sharp increase in new order volumes, which rebounded after weakening in April. Companies linked the increase to stronger customer demand, improved sales performance, industrial development, and marketing efforts. Foreign orders also rose, but at the slowest pace in seven months. 'Saudi Arabia's non-oil economy maintained solid momentum in May, with the PMI rising slightly to 55.8 from 55.6. While the pace of output growth eased to its softest since September 2024, overall activity remained robust,' Naif Al-Ghaith, chief economist at Riyad Bank, said. He added: 'Firms reported improvements in demand, new project starts, and greater labor capacity as key drivers. This expansion, though slightly softer, reflects stable operating conditions and continued confidence across the private sector midway through the second quarter.' The survey showed that output continued to grow, though at a softer rate for the fourth straight month. The construction sector recorded the strongest rises in both output and new business. Employment in the non-oil sector rose sharply in May, with the increase in staffing levels among the fastest seen in over a decade. Surveyed businesses attributed this to expansion efforts and higher output needs. 'Looking ahead, sentiment among non-oil firms has strengthened visibly. Business expectations looking forward reached their highest level since late 2023. Hiring momentum remained strong as companies expanded teams to support output growth, particularly in operations and sales,' Al-Ghaith said. Meanwhile, purchasing activity surged to a 14-month high. However, firms showed greater caution toward stockpiling, resulting in a slower accumulation of inventories compared to April. The report also indicated that input prices rose sharply, mainly due to increased supplier charges for raw materials. Wage-related inflation, however, eased. Despite cost pressures, companies reduced their selling prices, largely driven by a decline in service sector charges and competitive market conditions. The survey data were collected from around 400 private sector companies across the manufacturing, construction, wholesale, retail, and services sectors.
Free Malaysia Today
29-05-2025
- Business
- Free Malaysia Today
US corporate profits decrease sharply in Q1
US President Donald Trump's sweeping import duties have cast a shadow over the economy. (File pic) WASHINGTON : US corporate profits fell sharply in the first quarter (Q1) and could continue to be squeezed this year by higher costs from tariffs that are threatening to undercut the economic expansion. Profits from current production with inventory valuation and capital consumption adjustments dropped US$118.1 billion last quarter, the commerce department's bureau of economic analysis (BEA) said today. Profits surged US$204.7 billion in the October-December quarter. President Donald Trump's sweeping import duties have cast a shadow over the economy, knocking business and consumer sentiment as well as unleashing unprecedented volatility on financial markets. Yesterday, a US trade court blocked most of Trump's tariffs from going into effect in a sweeping ruling that the president overstepped his authority. Economists said the ruling, while it offered some relief, had added another layer of uncertainty over the economy. The increasingly uncertain environment was echoed in minutes of the Federal Reserve's May 6-7 meeting published yesterday, which noted 'participants judged that downside risks to employment and economic activity and upside risks to inflation had risen, primarily reflecting the potential effects of tariff increases'. Companies ranging from airlines, retailers to motor vehicle manufacturers have either withdrawn or refrained from giving financial guidance for 2025, citing the uncertainty caused by the on-again and off-again nature of some duties. Businesses front-loaded imports and households engaged in pre-emptive buying of goods last quarter to avoid higher costs, making it difficult to get a clear picture of the economy. 'The deluge of imports sent gross domestic product (GDP) declining at an upwardly revised 0.2% annualised rate in the January-March quarter,' the BEA said in its second estimate of GDP. The economy was initially estimated to have contracted at a 0.3% pace. It grew at a 2.4% rate in the fourth quarter (Q4). When measured from the income side, the economy also contracted at a 0.2% rate in Q1. Gross domestic income (GDI) expanded at a 5.2% pace in the October-December quarter. The average of GDP and GDI, also referred to as gross domestic output and considered a better measure of economic activity, declined at a 0.2% rate. Gross domestic output grew at a 3.8% pace in Q4.
