{"id":75964,"date":"2024-01-08T00:00:00","date_gmt":"2024-01-08T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/logistics\/2024\/01\/08\/non-oil-private-sector-activity-across-gcc-shows-continued-expansion-in-december-while-egypt-lebanon-continue-to-face-contraction\/"},"modified":"2024-01-08T00:00:00","modified_gmt":"2024-01-08T00:00:00","slug":"non-oil-private-sector-activity-across-gcc-shows-continued-expansion-in-december-while-egypt-lebanon-continue-to-face-contraction","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/logistics\/2024\/01\/08\/non-oil-private-sector-activity-across-gcc-shows-continued-expansion-in-december-while-egypt-lebanon-continue-to-face-contraction\/","title":{"rendered":"Non-oil private sector activity across GCC shows continued expansion in December, while Egypt + Lebanon continue to face contraction"},"content":{"rendered":"<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong><\/strong><strong>How MENA countries\u2019 non-oil private sector performed in Decemb<\/strong><strong>er:<\/strong> Purchasing manager indices (PMI) tracking non-energy sectors in the UAE, Egypt, Qatar, and Lebanon told a mixed tale in December. UAE remained in expansion as a thriving domestic market boosted orders, while Qatar remained broadly stable. Meanwhile Lebanon and Egypt remained in contraction amid economic and political upheavals in Lebanon, and a currency crisis and supply shortages in Egypt.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>REMEMBER- <\/strong>The all-important 50.0 mark is the threshold separating contraction from growth. Anything over 50 denotes expansion and anything below indicates contraction.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>The UAE grabs the spotlight: <\/strong>The country\u2019s non-oil private sector showed exceptional performance, with the country\u2019s headline PMI hitting its highest since mid-2019,according to <a target=\"_blank\" href=\"https:\/\/ent.news\/2024\/1\/306.pdf\" style=\"\" rel=\"noopener\">S&P Global\u2019s PMI (pdf)<\/a>. The index climbed to 57.4 in December, up from <a target=\"_blank\" href=\"https:\/\/enterprise.news\/logistics\/en\/news\/story\/d77b02a5-46ed-4af3-b472-650f1ce88009\" style=\"\" rel=\"noopener\">57 in November<\/a>, posting its second-highest reading in four-and-a-half years. A sharp increase in new business propelled output, as a strong domestic market buoyed orders despite weaker performance from external markets, panelists said.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Qatar was in-between:<\/strong> Qatar\u2019s non-energy private sector in December was \u201cbroadly stable\u201d, according to the <a target=\"_blank\" href=\"https:\/\/ent.news\/2024\/1\/368.pdf\" style=\"\" rel=\"noopener\">Qatar Financial Center PMI<\/a>. The headline number tracked at 49.8, slightly below November\u2019s <a target=\"_blank\" href=\"https:\/\/enterprise.news\/logistics\/en\/news\/story\/d77b02a5-46ed-4af3-b472-650f1ce88009\" style=\"\" rel=\"noopener\">51.5<\/a>, putting the index close to the 50.0 no-change mark. Output, new orders, and stocks all contributed to the stable readings, with growth in employment offseting shorter supplier delivery times.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Lebanon and Egypt underperformed:<\/strong> Lebanon\u2019s PMI inched further down to 48.4 from 48.9 in November, on the back of faster declines in output and new orders, according to <a target=\"_blank\" href=\"https:\/\/ent.news\/2024\/1\/304.pdf\" style=\"\" rel=\"noopener\">BlomInvest Bank\u2019s Lebanon PMI (pdf)<\/a>. The reading put the index at its lowest since the start of 2023, with panelists citing weak purchasing power, economic and political uncertainty, and spillovers from the Hamas-Israel war as factors driving decreases to output and new orders. Egypt\u2019s non-oil private sector contracted for its 37th straight month, but at a softer rate than the yearly average. according to S&P Global\u2019s Egypt <a target=\"_blank\" href=\"https:\/\/ent.news\/2024\/1\/305.pdf\" style=\"\" rel=\"noopener\">PMI (pdf)<\/a>. The country\u2019s PMI inched up to 48.5 in December, marginally higher than Novembers <a target=\"_blank\" href=\"https:\/\/enterprise.news\/logistics\/en\/news\/story\/d77b02a5-46ed-4af3-b472-650f1ce88009\" style=\"\" rel=\"noopener\">48.4<\/a>, with inflation continuing to stall orders and output.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Inflationary pressure cooled in the UAE + Qatar + Lebanon:<\/strong> UAE Vendors cut material costs after negotiating with buyers, causing purchase prices to rise at their softest rate since January 2023. Companies in turn also reduced selling prices as they sought to beat out competition through discounts, yielding a modest decrease in selling prices. Input costs in Lebanon rose at their softest rate since June, and consequently prices charged by private sector firms rose at a weaker pace. Purchase prices and output prices fell in Qatar, despite an uptick in wages and salaries.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Inflation remains a thorn in Egypt\u2019s side: <\/strong>EGP depreciation against the USD continues to drive rampant inflation in Egypt, while \u201cthe drag on demand conditions from inflation has not lost any power,\u201d Senior Economist at S&P Global Market Intelligence David Owen said in his comment to the report. At the same time, purchase prices continue to gain quickly, placing firms in a pricing \u201cconundrum\u201d as they have to make difficult choices between supporting demand or sustaining their margins, Owen said.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Firms\u2019 purchasing saw a boost in UAE + Qatar: <\/strong>UAE firms\u2019 purchasing activity shot up to keep up with rising demand projections. However, some firms downsized their stocks to offset inflationary pressures, causing inventory growth to slow in December to a three-month low. Meanwhile, volumes of inputs purchased by Qatari firms rose for the tenth month running, albeit at a slower rate. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>And in Egypt + Lebanon, purchases declined:<\/strong> Lebanon\u2019s purchasing activity fell for its third straight month. Despite reduced input purchasing there was a worsening in supplier delivery times. Falling output requirements saw purchasing in Egypt fall, albeit at the one of the softest rates seen in two years. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>New hires perked up Egypt\u2019s PMI: <\/strong>Egypt\u2019s headline PMI benefitted for greater hiring, with an uptick in staffing since September. More staff also helped firms keep backlogs stable in December.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>UAE + Qatar outlook remains positive: <\/strong>UAE firms remained optimisticfor the non-oil sector\u2019s growth over the coming year, with the outlook being among the best seen since pre-Covid, as strong sales spurred sentiment. Qatar\u2019s business outlook for the year ahead is also positive, although unsurprisingly optimism has softened since it peaked after the World Cup, Qatar Financial Center CEO Yousuf Al Jaida said in his comment to Qatar\u2019s PMI report.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Businesses in Egypt boosted their expectations for the year to come:<\/strong> Improvements in labor markets drove higher business sentiment in Egypt, with firms\u2019 outlook much higher than November\u2019s all-time low, and second-highest in 2023.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Lebanon is not as upbeat: <\/strong>Firms in Lebanon were pessimistic about the coming year, despite a slight uptick in the report\u2019s Future Activity Index for December. Panelists cited economic and political challenges as factors weighing on business sentiment in Lebanon. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>ICYMI-<\/strong><strong>S<\/strong><strong>audi Arabia\u2019s non-oil activity maintained growth in December: <\/strong>Saudi Arabia\u2019s headline PMI remained <a target=\"_blank\" href=\"https:\/\/logistics.enterprise.news\/\" style=\"\" rel=\"noopener\">unchanged<\/a> from <a target=\"_blank\" href=\"https:\/\/enterprise.news\/logistics\/en\/news\/story\/3142b604-4985-4464-8fdb-0e8fadfd56c4\" style=\"\" rel=\"noopener\">November at 57.5<\/a> last month, on the back of a surge in new orders, according to Riyadh Bank Saudi Arabia\u2019s <a target=\"_blank\" href=\"https:\/\/ent.news\/2024\/1\/192.pdf\" style=\"\" rel=\"noopener\">PMI (pdf)<\/a>. New orders achieved their highest level in six months due to a boost in business activity and exports, with firms increasing input purchasing and thereby boosting stocks. Firms also benefited from a sharp fall in supplier delivery times. Business sentiment remained high, albeit slightly lower than the yearly trend, with most firms expecting orders to keep rolling in.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>New orders increased in UAE, Qatar, and KSA, while weak demand, supply chain challenges and geopolitical tensions staggered Lebanon and Egypts PMI headline figure<\/p>\n","protected":false},"author":1,"featured_media":75965,"comment_status":"","ping_status":"open","sticky":false,"template":"single-feature.php","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[141],"tags":[27,139,140,124,32],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-75964","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-purchasing","tag-gcc","tag-pmi","tag-purchasing","tag-supply-chains","tag-trade","wpautop","entry"],"acf":{"mongo_id":"7ecfe9b0-306f-4785-a1fc-80949abf1789","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2024\/1\/307.jpg","photo_position":"above","homepage_title":"","full_issue_title":"Non-oil 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