FYI
Nawaf Y. Husein
Faculty Member
Msc, CRP , CLBB
Saudi Training Society Member
Institute of Banking
Saudi Arabian Monetary Agency ( SAMA)
P.O.Box : 10820 Riyadh 11443 Saudi Arabia
Tel : + 966 1 463 3000 Ext. 3825
Fax: + 966 1 466 2368
Mobile : + 966 55 48 44 828
SKYPE : abuhejleh2
Dear Readers,
Business sentiments among Saudi Arabia's have improved in the fourth quarter of 2012. The BOI survey for Q4 2012 reveals higher optimism levels compared to those recorded in the previous quarter.
Hydrocarbon sector
The D&B BOI survey reveals that Saudi Arabia's hydrocarbon sector optimism has improved in Q4 2012, gaining 2 points to 25 from 23 in the third quarter of 2012. Though two out of three parameters have retreated from Q3 levels, a strong rebound in the profitability outlook has helped the composite index to log an uptrend. The parameter score for Net Profits has spiked by 25 points to 48 in Q4 2012 from 23 in the previous quarter. The Level of Selling Prices expectations of the industry players have moderated by 3 points to 5 in Q4 2012. The BOI for Number of Employees too has lowered to 40 in Q4 2012 from 53 in the third quarter of 2012.
Non-hydrocarbon sector
The composite index for the non-hydrocarbon sector stands at 47 in Q4 2012, compared to the index score of 37 in the third quarter of 2012. The BOI survey reveals that five out of the six non-hydrocarbon sector parameters have improved in Q4 2012. The BOI for the Volume of Sales parameter has registered a value of 56 compared to 39 in Q3 2012, while the BOI for the New Orders parameter is recorded at 57 compared to 52 in Q3. The BOI for Level of Selling Prices stands at 19 in Q4 2012, compared to 15 in the last quarter. The inflation rate in Saudi Arabia was recorded at 3.8% in August 2012. There is expectation of a relative stability or a slight increase in the inflationary pressures in the coming period. Profitability expectations have also strengthened from the previous quarter. The BOI for the Net Profits parameter is recorded at 53 in Q4 2012, up from 37 in the third quarter of 2012. The BOI for Number of Employees has improved by 4 points to 48 from 44 in Q3 2012. The BOI for Level of Stock stands at 16 in Q4 2012, down from 29 in the previous quarter.
Four out of the five business sectors in the non-hydrocarbon sector have registered higher optimism levels while the one has tracked sideways. The construction sector holds the most optimistic outlook among the various sectors surveyed for the fifth consecutive quarter. The manufacturing sector holds the least optimistic outlook for Q4 2012.
Factors impacting business:
Heightened global growth concerns have impacted the overall business outlook in Saudi Arabia. Only 25% of the respondents in the non-hydrocarbon sector have said that they do not expect any negative factors to influence their business operations in Q4 2012 compared to 45% in Q3. 36% are concerned about availability of skilled labor, 14% foresee availability of finance as a concerning factor and 10% are concerned about inflationary factors. The remaining 15% of the respondents are concerned about factors such as market conditions, competition, securing labor, delays in payments and supplies of raw material, etc. In terms of investment in business expansion in Q4 2012, 59% of the non-hydrocarbon companies have said that they would invest in business expansion in Q4 2012, 25% do not plan any investments and 16% remain unsure.
For this quarterly edition of "Saudi Arabia Business Optimism Index", the following attachments are provided:
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| BOI Saudi Arabia-English | An English Presentation |
| BOI Saudi Arabia-Arabic BOI Saudi Arabia-English BOI Saudi Arabia-Arabic BOI Saudi Arabia-English | An Arabic Presentation Press Release Press Release Report
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Best regards,
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