JEDDAH: Saudi Arabia's Purchasing Managers' Index stayed above 55 for a 14th straight month in September, signaling the country's businesses still expect strong economic growth. The index, compiled by HSBC Holdings Plc and Market Economics, fell to 58.4 in September from 59.1 in August, according to an e-mailed report. It's the first time such an index has been published for Gulf Arab economies. A reading above 50 signals that companies expect output to increase. Growth in Saudi Arabia, world's biggest oil supplier, slowed to 0.6 percent last year as crude output declined and prices dropped. The government is seeking to revive the economy with a $400 billion, five-year stimulus package that includes investments in education and renewable energy. “You see in Saudi Arabia an economy that has been almost lifted by the policy response,” said Simon Williams, the Dubai- based chief Middle East economist at HSBC Plc. “New orders are good, current activity is good, and I'm seeing growth of employment is there in Saudi as well.” Saudi Arabia's economy will expand by 3.7 percent this year and 4 percent in 2011 as it benefits from higher crude oil prices and government spending, Jeddah-based National Commercial Bank forecast on Oct. 2. The PMI in the United Arab Emirates rose to 52.6 in September, a 10-month high, HSBC said today. Output growth at UAE non-government companies picked up again during September, growing at the fastest pace since April, and companies added employees, HSBC said in the report. Dubai, the second-biggest member of the UAE, issued its first bond last week since its failure to repay debts on time roiled global markets in November. The sovereign sale may pave the way for companies in the region to resume borrowing on international markets. “The UAE is a story that says growth, expansion - but certainly not the same expansion as Saudi Arabia,” Williams said. “What I see is an economy that stabilized and is now normalized and is beginning to show some signs of recovery.” 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.
