saudi arabia business optimism index – q1 2013
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Saudi Arabia Business Optimism Index – Q1 2013. Presented by Dun & Bradstreet South Asia Middle East Ltd. (D&B) National Commercial Bank (NCB). Business Optimism Index. - PowerPoint PPT PresentationTRANSCRIPT
Saudi Arabia Business Optimism Index – Q1 2013
Presented by Dun & Bradstreet South Asia Middle East Ltd. (D&B)National Commercial Bank (NCB)
Business Optimism Index
• The D&B Business Optimism Index is recognized the World over as an indicator which reflects the pulse of the business community
• Provides insight into the short-term outlook of business units on key business parameters including sales, profits, pricing, headcount and investment
• Provides analysis of major trends and issues concerning the business community
• Sample of business units representing Saudi Arabia’s economy is selected
• 500 business owners and senior executives across business units are surveyed
• The Q1 2013 survey was conducted during December 2012
Survey
• Respondents are questioned about their expectations on relevant business parameters
• Survey also captures respondent feedback on current business conditions
Survey
• The Composite Index is calculated separately for the hydrocarbon and non- hydrocarbon sectors
• To provide further analysis of the non-hydrocarbon sector, composite indices are calculated for each of the five economic subsectors
Composite Business Optimism Index
Real GDP Growth (%) Global composite manufacturing & services PMI
Source: JP Morgan and markit economicsSource: EIU
• Global growth to strengthen in 2013 from the previous year • Global composite PMI touches a nine-month high in December 2012
World Economic Outlook
• Mining & Quarrying sector growth estimated at about 6% in 2012 • Real GDP growth for 2012 recorded at 6.8%• All key sectors witnessed GDP growth in 2012.
Source: CDSI * Preliminary Source: CDSI
Economy of Saudi Arabia
Mining & Quarrying and Total GDP at Constant Prices (SAR mn)
GDP by Kind of Economic Activity at Constant Prices(SAR mn)
• Hydrocarbon sector optimism rises to 33 on strong profitability and hiring outlook• Strong sales, new orders and profitability outlook lifts non-hydrocarbon sector index
Non-hydrocarbon sectorHydrocarbon sector
Composite Business Optimism Indices
2009 2010201120122013
BOI Trends: Non-hydrocarbon Sector
Manufacturing Sector
• Global Manufacturing expands in December 2012 for the first time since May• Optimism levels in Saudi Arabia’s manufacturing sector jumps on strong sales and
new orders
Global Manufacturing Purchasing Managers’ Index
Source: JP Morgan and markit economics
• Global construction sector growth expected to be moderate in 2013• Saudi Arabia’s construction sector holds the most optimistic outlook among all sectors
for the sixth quarter in a row
Construction Sector
Trade & Hospitality Sector
• Global retail sector to face challenges in 2013 as global growth remains uncertain• Composite BOI for the sector rises on strong sales, new orders and profitability
outlook
Transport & Communications Sector
• Global transport sector growth remains subdued given slow recovery of the trade sector• Sector’s BOI moderates as most parameters slide
Finance, Real Estate & Business Services Sector
• Global Services PMI touches a eight month high in November, held steady in December 2012
• Optimism levels in the sector rise to 51 as most parameters improve
Global Services Purchasing Managers’ Index
Source: JP Morgan and markit economics
BOI Trends: Hydrocarbon Sector
• OPEC has forecasted that oil demand will grow at around 0.8 million bpd in 2013• The composite BOI improves on strong profitability and hiring outlook
OPEC monthly basket price (US$/barrel) Business Optimism Indices
• OPEC has forecasted that oil demand will grow at around 0.8 million bpd in 2013• The composite BOI improves on strong profitability and hiring outlook
Other Key Highlights
• 41 % Saudi businesses feel that there will be no negative factors impacting their business operations in Q1 2013
• Availability of skilled labor is the leading concern for both the hydrocarbon and non-hydrocarbon sector businesses
• 57% of companies in the non-hydrocarbon sector intend to invest in business expansion compared to 59% in Q4 2012
• Business optimism improves in the following non-hydrocarbon sectors: Manufacturing, Construction, Trade, Restaurants & Hotels and Finance, Insurance, Real Estate & Business Services
• All six parameters in the non-hydrocarbon sector evince an upward trend
• Hydrocarbon sector optimism improves with a rise in profitability expectations and improvement in the hiring outlook
Conclusion
THANK YOU