By Ed Attwood
$130bn spending package drives business outlook, kingdom’s firms wary over skills shortage
Business confidence in Saudi Arabia’s non-hydrocarbon sector has soared to an all-time high, buoyed by the high oil price, the stable economy, and King Abdullah’s social spending packages, according to new data.
The Dun & Bradstreet business optimism index showed that the non-energy segment of the economy is expecting a rise in demand levels in the second quarter of this year.
Respondents to the survey said that they were more optimistic about new orders, higher sales volumes, higher selling prices and higher net profits than in the previous quarter.
Around 55 percent of respondents in the sector also said that they did not expect any negative factors to affect their operations in the second quarter.
However, shortage of skilled labour ranks as the most important concern (21 percent citing it), followed by availability of finance (14 percent) and inflation (5 percent).
A total of 53 percent of companies in the non-hydrocarbon sector said they would invest in business expansion in the second quarter, up from 45 percent in the first.
The index also showed that transport and communication is the most optimistic in terms of both future demand and profits.
The trade and hospitality sector was the only segment to see a decline in business confidence, due to a lower expectation on profits.
In the hydrocarbon sector, confidence also improved by one point against the previous quarter, compared to the three points for the non-hydrocarbon sector.