Latest news with #PurchasingManagersIndex
Gulf Insider
a day ago
- Business
- Gulf Insider
Saudi Businesses Add New Jobs At Fastest Pace In 14 Years: Riyad Bank PMI
Saudi businesses are continuing to add new jobs at top speed – but this is also leading to a 'record rise' in their wage costs. Across sectors, new jobs are seeing the 'sharpest rise' since May 2011, according to the latest PMI data. This is where the cost factor kicks in. 'This surge in demand for staff contributed to a record increase in wage costs, which added to overall cost pressures and led to a renewed rise in output prices,' according to a report by Riyad Bank. Adding to this is the cost of purchases, which in June rose at the fastest since February 2025, in part 'driven by stronger demand and rising geopolitical risks'. 'Despite these cost challenges, firms broadly raised their selling prices, reversing the declines seen in May and signaling an improved ability to pass on higher costs to customers,' said Naif Al-Ghaith, Chief Economist at Riyad Bank. The Saudi travel and tourism sector is, these days, one of the biggest hirers in the Kingdom, with the launch date of Riyadh Air coming closer on the horizon. According to hiring consultants, there is a whole slew of aviation facing businesses that are also adding to their payrolls. The Saudi non-oil economy saw its June PMI climb to 57.2 from 55.8 in May. The higher reading is 'supported by higher output levels, rising demand, and an active labour market', says Riyad Bank. 'Firms largely linked the pickup in activity to improving sales, new project starts, and better demand conditions, although the pace of output growth was softer compared to previous highs.' (The Purchasing Managers Index is a composite score that tallies business spending patterns, order intake and output, inventory levels as well as hiring. A score of 50 plus shows businesses in expansion drive.) 'Sentiment among non-oil businesses remains highly positive,' said Al-Ghaith. 'Confidence about future activity climbed to a two-year peak, supported by healthy order pipelines and stronger domestic economic conditions. 'However, cost pressures became more pronounced in June. Staff costs rose at a record pace as firms worked to retain talent, while purchase prices saw their fastest increase since February, partly driven by stronger demand and rising geopolitical risks.'
Bloomberg
2 days ago
- Business
- Bloomberg
Israel-Iran War Casts Shadow Over Dubai, UAE Business Conditions
Business conditions in the United Arab Emirates suffered a setback in the closing stages of the second quarter after Israel's war with Iran disrupted sales in June. The UAE's Purchasing Managers' Index rose only slightly to 53.5 last month from 53.3 in May, said S&P Global, citing households' reluctance to spend for a drop off in demand.
Mint
3 days ago
- Business
- Mint
Mint Primer: China's economy beats the gloom. Can it do more?
Despite trade disruptions, sluggish domestic consumption, a lingering property sector crisis and threat of deflation, the Chinese economy has managed reasonable growth. Mint examines the sustainability of this growth and measures China can take to emerge unscathed. How is the Chinese economy doing? Despite the disruptions to trade, caused by a trade war with the US that briefly saw Washington impose tariffs running into an unbelievable three digits, China's merchandise exports remained robust. In the first five months of 2025, they have risen by 6%. This, notwithstanding a 35% fall in exports in May to the US—its biggest market. Domestic demand is good, too. Retail sales in the first four months of 2025 grew by 4.8%, a good 1.5 percentage point better than the same period last year. The Purchasing Managers Index for May, released on Monday, showed a marginal improvement in manufacturing activity. How did China manage this show? It increased exports by focusing on non-US markets. Exports to India, Brazil, East Asia and Europe rose sharply. The Chinese government has also announced fiscal and monetary stimulus amounting to 1.6% of its GDP in a bid to catalyse domestic demand. This includes subsidies for trading in consumer goods and cuts in the cost of housing loans. Consumption of household appliances and furniture posted double-digit growth in the first four months of this year. Public spending has also increased. This caused infrastructure investments to rise 11.6% in the January-April period compared with 10% last year. Has China's growth outlook been revised? Citigroup has raised China's growth estimate for 2025 to 5% from earlier 4.2%. According to the World Bank, China posted 5% growth in 2024. In the first quarter of 2025, its economy grew by 5.4%. That was before the new trade war. The World Bank projects a 4.5% growth for 2025. An upward revision can happen if China's economic show sustains. What are the risk factors? There are many. Though the US and China have struck a trade deal, it remains fragile. Many countries are raising their defence against cheap Chinese goods. This could hurt exports. The revival in domestic demand is not broad-based, reflecting weak consumer confidence. Experts attribute this to slower income growth and uncertain job prospects. The property sector crisis looks sticky as home prices continue to decline. Deflationary pressures remain. The economy, experts say, needs more stimulus. What can Beijing do to improve things? Apart from a stimulus, economists have called for reforms to address slowing productivity, high debt and an ageing population that are pulling down economic growth. With little healthcare protection and a frayed social safety net, the Chinese hold back on spending when uncertainty increases. For a sustained improvement in household spending, there is a need to direct fiscal resources to improve medical cover and safety net. The property crisis needs a lasting solution as declining home prices hurt consumer sentiment.
The Hindu
3 days ago
- Business
- The Hindu
Demand distress: on slowdown in the overall IIP
The new financial year has gotten off to a relatively poor start when it comes to industrial production. Growth in the Index of Industrial Production slumped to a nine-month low of 1.2% in May 2025. This follows an eight-month low of 2.6% in April. Taken together, this puts the average growth in the index so far in 2025-26 at just 1.9%, down from the 5.7% average in 2024-25. A major reason behind the dip in May's industrial performance was due to the electricity sector, which contracted 5.8%, its worst performance since June 2020, nearly five years ago. This poor performance in electricity generation can be put down to an unusually cool May, but it could also point towards lower offtake for industrial purposes. The fact also remains that the slowdown in the overall IIP has been broad-based — several key sectors have either contracted or slowed sharply. The manufacturing sector slowed to a growth of 2.6% in May, down from 5.1% in May last year. A deeper look shows that this slowdown was driven by contractions in the manufacture of textiles, leather products, chemicals, pharmaceuticals, electronics, and furniture. While some of these are core sectors, most are consumer-facing, implying that demand in the economy is not picking up, and may even be slackening further. This is backed by the fact that the consumer durables and nondurables sectors simultaneously contracted for the first time since November 2023. A sub-sector analysis of this data further reinforces the takeaway that demand is weak. Within consumer durables, the IIP data showed significant contractions in the production of footwear, books, plastic furniture, shaving razors, stainless steel utensils, computers, phones, air-conditioners and coolers. These are all items of discretionary spending, not strictly essential, which implies that people are holding off on their purchases. Even among consumer non-durables, the items that have seen contractions — such as meat, honey, fruit juice, jams, sugar and bottled water — are those that are eschewed the quickest during lean periods. The situation does not seem to have improved much in June either. The private sector manufacturing Purchasing Managers Index report, released on Tuesday, shows that while demand for intermediate goods is doing well, the same cannot be said for either capital or consumer goods. In recent interviews, Finance Minister Nirmala Sitharaman has expressed confidence that urban demand is recovering and that Budget 2025's tax breaks will boost demand by the time the festival season rolls around. The progress of the monsoon so far indicates that rural demand may indeed pick up by then, but urban demand remains a worry. With trade remaining subdued and uncertain, domestic demand weakness does not augur well for the economy in 2025-26.
Business Times
4 days ago
- Business
- Business Times
South Korea factory activity shrinks for fifth month but at milder pace: PMI
[SEOUL] South Korea's factory activity contracted for the fifth straight month in June, though the pace of decline eased, supported by improving domestic economic prospects under the country's new administration, a business survey showed on Tuesday (Jul 1). The Purchasing Managers Index (PMI) for manufacturers in Asia's fourth-largest economy, released by S&P Global, edged up to 48.7 in June, from 47.7 in May. The index has stayed below the 50-mark, which separates expansion from contraction, since February. 'Manufacturing output and sales both decreased, albeit at a softer rate than that seen in May, as firms signalled pockets of improvements in the domestic market,' said Usamah Bhatti, economist at S&P Global Market Intelligence. South Korea's consumer sentiment reached a four-year high in June, buoyed by political stability following a snap presidential election on Jun 3 that ended six months of uncertainty, according to an earlier central bank survey. In Tuesday's survey, business sentiment regarding the year-ahead outlook for output rebounded from the previous month to its strongest since May 2024, as firms reported reduced concerns about global economic risks. However, while output and new orders fell at a milder pace, new export orders declined slightly faster due to weaker sales across key markets such as Japan, China and the United States, the survey found. South Korea's new administration, led by President Lee Jae Myung, has pledged short-term measures to support the economy as tariff negotiations continue with Washington. A senior South Korean trade official said on Monday that Seoul will seek an extension to the 90-day pause on US tariffs, set to expire next week, as talks are expected to continue beyond the deadline. REUTERS
