Saudi oil sector optimism rebounds into positive territory for Q2

New business survey also shows a dip in confidence among Saudi non-oil firms for second quarter of 2016
Saudi oil sector optimism rebounds into positive territory for Q2
By Staff writer
Sat 04 Jun 2016 10:27 AM

Optimism about Saudi Arabia's hydrocarbon sector edged back into the positive territory for the second quarter of 2016 but confidence among non-oil firms dipped, according to a new business survey.

The Dun & Bradstreet Business Optimism Index survey for Saudi Arabia registered a reading of 3 in Q2 for the hydrocarbon sector, reflecting a rebound from -12 in the previous quarter as low oil prices continue to impact on the economy.

The survey also showed that the non-hydrocarbon sector's optimism has dropped to the second lowest level in the series, to a score of 21 in Q2, compared to 28 in the last quarter and 43 in Q2 2015.

The construction and transport sectors both registered sharp declines in their outlook, according to the survey which said that the adverse impact of low oil prices and competition are the chief concerns for non-oil sector firms.

It also showed that non-hydrocarbon sector firms are less optimistic about the business environment outlook, with 39 percent of them not expecting to face any obstacle in Q2 compared to 52 percent in the previous quarter.

Conversely, 48 percent of Saudi oil and gas firms do not expect any hurdles to their business operations during Q2, up from 35 percent last quarter.

The survey said SMEs are modestly more optimistic than large companies in Q2, with their respective composite scores at 22 and 19.

Assad Shaikh, associate director - Research & Advisory Services, Dun and Bradstreet South Asia Middle East Ltd, said: "Sentiments remain mixed in Saudi Arabia. The BOI score for the hydrocarbon sector is recorded in the positive territory at 3 in Q2, 2016, up from last quarter's all-time low of -12.

"On the other hand, the survey revealed that the composite BOI for the non-hydrocarbon sector dipped to the second lowest level in the series to 21 in Q2, 2016 down from 28 in Q1, 2016."

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