KSA, Qatar, and the UAE saw business conditions improve in November, while Lebanon and Egypt’s PMIs remained in contraction: Purchasing Managers Indices (PMI) tracking non-oil private sectors in KSA, Qatar, the UAE, Egypt, and Lebanon painted a mixed story in November. Qatar, KSA, and the UAE remained in expansion due to improved business conditions, despite Saudi Arabia’s PMI growing at a softer pace. Egypt and Lebanon remained in contraction in November amid inflation and supply chain challenges.

Remember: The all-important 50.0 mark is the threshold separating contraction from growth. Anything over 50 denotes expansion and anything below indicates contraction.

Qatar’s non-oil private sector rose for the first time in four months on the back of an acceleration in new business and output, according to Qatar Financial Center’s PMI (pdf). The PMI reading expanded to 51.5, up from 50.8 in October, and remaining above the 50.0 mark separating growth from contraction for the tenth successive month.

Purchases, output and new orders continued to improve: Total business activity rose further in November, with an expansion in output, new business, strong sales at goods producers, particularly at construction firms. Supply chains also continued to improve, with lead times shortened for the nineteenth consecutive month, while purchasing of input also expanded for its ninth consecutive month, and at the fastest rate in four months as firms addressed their rising backlogs.

However, the pick up in demand resulted in a rise in outstanding business — a first in 16 months. Higher backlogs were accompanied with more hires, increased purchasing and a rise in input stocks, according to the PMI.

The UAE’s non-oil private sector activity continued to grow in November on the back of a “sharp rise” in new orders, according to S&P Global’s latest Purchasing Managers’ Index (PMI) (pdf) out this morning. The index dipped slightly to 57.0 from its four-year high 57.7 in October, driven by new orders and a surge in companies’ purchasing activity.

New orders are booming, despite inflation: Firms purchased inventory at a quickened pace during the month as they “looked to keep robust stock volumes amid strong demand,” according to the PMI. November saw purchasing levels jump to their highest level since July 2019, while inventories saw their “sharpest expansion” in almost six years. “At the same time, firms saw another solid increase in purchase prices, which despite softening from October, was the second-quickest since mid-2022,” S&P notes.

Saudi Arabia’s non-oil activity growth cooled down in November: The kingdom’s headline PMI eased in November to 57.5, down from 58.4 a month earlier on the back of a slowdown in export demand and inflationary pressures, according to Riyadh Bank Saudi Arabia’s PMI (pdf). “The weak performance in exports can be primarily attributed to the petrochemical sectors as this sector represents more than 29% of non-oil exports,” Riyadh Bank chief economist Naif Al Ghaith said. The fall was also due to moderations in the rate of staff and inventory growth, and a sharp reduction in delivery times.

New orders + output made up for the decline, but cost pressures remained: New orders reached their highest level in five months due to good market conditions and an uptick in investments, according to the statement. Raw material prices rose at their quickest rate since June 2022 and propped up the price of final goods and services, an increase that was partially offset by competitive pressures

Egypt’s PMI remained in contraction on the back of rising inflation: Egypt’s non-oil private sector contracted at a softer pace in November, though businesses continued to reel from inflationary pressures and falling demand, according to S&P Global’s Egypt PMI (pdf). The country’s PMI rose to 48.4, up from 47.9 in October, making it the 36th consecutive month that business activity has been in decline. This came on the back of persistent falls in output amid dampened consumer demand, and unresolved import issues, according to S&P Global. Contraction was seen across all sectors, but was most marked among wholesale and retail firms.

A surge in charges = a game of catch-up: Businesses hiked up their selling charges at the steepest rate since March, in order to absorb the higher costs they have incurred as a result of inflation. However, client sales dropped, leading to a fall in employment and purchasing, though purchasing softened at the slowest pace since February 2022, leading to a slight expansion to inventories.

Eased security concerns and a recovery in export orders paved the way for Lebanon’s PMI to inch up to a four-month high of 49.5, according to BlomInvest Bank’s PMI (pdf). Contraction slowed from 48.9 in October, on the back of a softer decline in domestic demand, and the strongest improvement in export orders in eight years, BlomInvest Chief Economist and research head Ali Bolbol commented.

Like Egypt’s PMI, cost pressures persisted, leading to an increase in firms’ selling prices.There was a hesitancy recorded among businesses to stockpile items, and purchasing activity declined, while inventory levels were held unchanged. The lack of new business meant that backlogs were easily depleted.

KSA, UAE, Qatar and Lebanon’s outlook remained positive: Qatar’s outlook for activity improved, while prospects are still looking good in Saudi with firms anticipating a “continuous increase in output, fuelled by a robust inflow of new projects,” Al Ghaith said. Emirati firms also believe activity will remain strong, but remain wary of rising competition. Lebanon’s business confidence improved to the highest level in three months, on the back of signs of improvement in the economy, though half of the survey panel anticipated lower activity in the coming year.

Though firms in Egypt were not as upbeat: Egypt’s outlook for the next year has dropped to its worst since at least April 2012 when S&P Global began collecting data. The expectations of non-oil companies in most sectors were “only slightly positive,” while those operating in manufacturing and construction were pessimistic overall.