KSA oil sector dull as 55% say no plans to spend
A survey by Saudi Arabia's National Commercial Bank (NCB) showed a 'bearish outlook' for the hydrocarbon sector, as it dropped to -2 points in Q3 2016
About 44% of businesses in Saudi Arabia are not aware of the national vision of the economic transformation 2020, the Kingdom’s National Commercial Bank (NCB) has said in its ‘Saudi Arabia Business Optimism Index (BOI)’ survey for Q3 2016.
The index showed a ‘bearish outlook’ for the hydrocarbon sector as it dropped to -2 points in the third quarter of this year.
This drop in the oil and gas sector goes in line with earlier expectations of a drop in the GDP by 13.4%.
They survey also showed that 55% of the oil sector companies have no plans to expand their investments, with 31% of the non-oil sector are planning to develop their investments particularity the real estate and transportation sectors.
With regards to the non-oil sector, 45% of the players stated that they see that the increase in water and electricity prices did not affect their businesses.
The net profit and the employment rate in the construction sector noted the figures is low due to the delay in projects and reduction of new projects, which led to low optimism rate that drove only 26% to opt for more investments in this sector.
The small and medium businesses were more optimistic, the survey noted.
The survey is issued by NCB in collaboration with Dub & Brandstreer South Asia and Middle East.
The increase in government fees and the lift of subsidiary will help grow the economy in the medium and the long run, noted Said A. Al-Shaikh, the Group Chief Economist at NCB said at the survey launch press conference last week at the bank’s headquarters.
He noted that the new added fees on expatriates is to decrease the gap between the employment of Saudis and non-Saudis and it will give a chance for more Saudis to join the job market.
According to Al-Shaikh, the survey revealed that the challenges which different sectors face are the government regulations and the low crude oil prices.