Both the oil and non-oil sectors in Oman have experienced growth during the first nine months of last year, based on official figures. The Omani GDP swelled by almost 23.3 percent in that time period, resulting from robust oil prices and increased crude output.
Reported to be about RO 1.62bn during the opening nine months in 2010, nominal GDP in Oman rose to almost RO 2.07bn in the same period last year, according to data from the National Economy Ministry released to local media.
Breaking down those figures, the greatest jump occurred in the oil sector, where the figures rose by 34.9 percent. The non-oil sector also experienced growth, although that sector rose by just 13.1 percent over the same time period.
Based on the report, increases were seen in the Omani crude average price and Oman’s oil output during that time period. The Gulf nation was expanding the hydrocarbon sector to turn around a declining oil output.
In the opening nine-month period of 2010, the average price of Omani crude sat at $76.50. During that same time period in 2011, the crude price rose to almost $102.06. Production also increased, rising from 860,200 barrels per day (or bpd) to 883,200 bpd.
When looking at sectors, industry reported one of the leading rates with about 18 percent growth. Services came in at 11.5 percent growth and farming rose by 4 percent.
Oman is not among the OPEC member states. Estimates regarding Oman’s oil reserves report about five billion barrels proven, with natural gas reserves coming in at almost 30 trillion cubic feet.
Oman’s revenue and the national economy were given a healthy boost after an LNG plant with the capacity to process 10 million tonnes per year was built in Sur, a southern port of Oman.
Saudi Private Sector Experiencing Robust Growth
Expansion in the non-hydrocarbon private sector of Saudi Arabia has stayed on course for growth, according to a recent survey completed by the Saudi British Bank (or SABB) and Markit Economics.
The SABB HSBC Saudi Arabia PMI (or Purchasing Managers’ Index) evaluates the performance of Saudi Arabia’s services and manufacturing economic sectors, reporting a score of 59.6 for February. This score denotes that business conditions have experienced significant improvement.
The performance of non-oil producing firms in the Kingdom’s private sector is measured based on several variables, such as total output, new orders and exports, input and output prices, and employment, among others.
Business conditions in non-hydrocarbon companies remained on a positive path through February, driven by expanding activity, higher levels of new orders and rapid growth in stocks of purchase and employment.
January’s score was slightly higher, coming in at 60. Any score above 50 is considered sector expansion, while a score below 50 denotes a declining sector.
New orders within Kingdom businesses rose sharply back in January, driven mostly by healthy domestic demand.
Output in non-hydrocarbon private firms also surged over that month, as a reflection of strengthening growth reported in new business. Also, Saudi non-oil businesses have expanded their workforces at the highest rate recorded over the last eight months.
The price inflation rate of inputs surged almost to a record high in the series, with greater costs pressures resulting from robust demand. Output prices rose modestly, compensating in part for the increase in total costs.
Along with the healthier economic conditions, rapid input price inflation resulted from strong input demand.
Significant growth in new work receipts was recorded in February, as respondents noted the continuing market condition improvements.
It was clear that domestic demand played a key role in driving sales.
According to the report, new export orders surged at an impressive rate, the strongest seen in seven months. Several of the panelists involved credit targeted marketing strategies for that positive move.
Higher levels of new business pushed non-hydrocarbon private sector Saudi companies to boost output over February.
That sharp expansion dropped just below the seven-month high figures reported in January. Work backlogs built up over the course of January, resulting from growth in new orders moving beyond growth in activities.
In order to keep up with surging levels of new orders, private sector Saudi businesses in non-oil boosted purchasing, continued to build up stocks and expanded the workforce in February.
Job creation rates held steady and rose to a high over the last eight survey periods. Several panelists made note of the results from Saudization policies. As buying activities rose at a rapid pace over the past year, accumulation of stocks of purchases reached a seven-month high.
Cost pressures will feel the effect of robust demand, with overall inflation in input prices surging to record highs for the series. Figures indicate that rising purchasing costs continue to drive the rising input prices. Panelists noted that higher prices have been reported in food stuffs to fuel.
On the other hand, salary inflation declined to a new four-month low, indicating that only modest increases will be seen in wages.
Output prices rose during the survey period, compensating in part for rising total costs. Although demands are increasing, vendors continued to improve their performance throughout February.
Panelists noted that higher levels of competition and extra capacity have resulted in sharper rates of shortened lead times over the last two years.