Saudi Arabia has shown consistent signs of economic strength as its Purchasing Managers’ Index has remained above 55 for a 14th straight month in September.
The index is calculated by HSBC Holdings Plc and Markit Economics and represents the overall economic situation of a country. The index plummeted to 58.4 in September from 59.1 in August but it was still above 50, the threshold that define a country's economic health. The index also means that companies can expect an increase in output and speedy delivery of orders.
The aggregate economic growth has slowed down in Saudi Arabia, the largest oil supplier of the world. It dipped to 0.6 percent last year amid declining output of crude oil and the slump in oil prices globally. The Saudi government has already announced a $400 billion stimulus package spanning over five years and including investments in education and renewable energy, among other fields.
Economists are positive about Saudi Arabian economy as it is expected to see an expansion of 3.7 percent this year and 4 percent in 2011. Prices of crude oil are going up and so is the government spending, according to Jeddah-based National Commercial Bank forecast on Oct. 2.
The neighboring state of the United Arab Emirates has also seen its PMI rising to 52.6 in September, which is the highest in 10 months. U.A.E. non-government companies have seen a growth during September, an improvement since the slump that started in April. HSBC also estimates a net increase in the number of employees at the UAE companies.
