Dubai: Saudi Arabia’s HSBC Purchasing Managers Index climbed to the highest level in four months in September as economic growth gathered momentum in the world’s largest oil exporter.
The index added two points to 60, its biggest monthly increase since January, HSBC Holdings Plc said in a report on Wednesday, led by a jump in output and new orders. HSBC PMI for the UAE, the second-biggest Arab economy after Saudi Arabia, rose about 0.5 point to 53.8.
The gain in Saudi Arabia “is particularly striking given weak September PMI scores for many other major emerging and developed markets,” Simon Williams and Liz Martins, Dubai-based HSBC economists, wrote in the report. “We expect this outperformance to persist.”
A government plan to spend more than $500 billion has sparked record sales of Islamic debt and the fastest expansion in bank loans to private businesses and consumers since 2009. The kingdom’s benchmark stock index has gained 7.5 per cent this year, after dropping 3.1 per cent in 2011.
The PMI increase “strongly suggests the economy will maintain momentum in the months ahead,” HSBC said. The economy may expand 5.4 per cent this year, the bank said on Tuesday, compared with a forecast of 4.1 per cent three months ago.
HSBC also raised its estimate for the UAE’s growth to 3.7 per cent from 2.8 per cent. While the country’s PMI reading lags behind Saudi Arabia’s, it “continues to demonstrate a much more robust pace of growth than its developed and emerging market counterparts outside of the region,” HSBC said.
The Purchasing Managers’ Index, which is seasonally adjusted, is based on data compiled from monthly replies to questionnaires sent to executives in 400 companies in each country’s industrial and service sectors.
