As the rest of the world winds down after the festivities of the holiday season, businesses in MENA are gearing up for the busiest season of the year during Q1 and going into Q2 of 2025. Ramadan is set to commence on the 10th of March, followed by the first Eid of the year, around mid-april. Traditionally, this is the ‘giving season’ , and busiest retail season for this region. Consumers will be spending on gifts, clothing, homeware and groceries.
GCC countries are closing FY 2024 strong, and this performance is likely to be sustained through the start of 2025. Here’s a snapshot of the gulf’s economic performance in Q4 2024.
*An index value of above 50 indicates an expansion in the manufacturing sector, while an index value of below 50 indicates a contraction in the sector.
Saudi Arabia:
PMI rose for the 4th consecutive time, by 2.1 points to 59.0 marking the strongest growth in non-oil activity for 16 months. Business activity expanded for new orders, purchasing activity and foreign sales. Domestic demand has partially recovered, following a modest pull-back during Q3. Inventory grew at the fastest pace since March, with many firms intending to boost stocks in preparation for an anticipated upturn in demand. Nonetheless, stronger input purchasing stretched supply chains in November, leading to the slowest improvement in vendor performance in 15 months.
Higher purchasing activity and inventory expansion suggests businesses are gearing up for demand growth continuing its steady rise, both seasonally and overall.
UAE:
PMI remained stable, rising by only 0.1 points to 54.2 in November. Even though the figure remains above the 50.0 threshold for expansion, growth is proving to be slower paced than earlier in 2023.
In contrast to Saudi, Kuwait and Qatar, Emirati firms showed caution in future activity expectations, which limited input stock accumulation. Purchases were mainly used to meet current output needs. Supplier delivery times improved, leading to a slight rise in inventories. We are likely to see this trend sustained.
The outlook remains positive, as new orders have reached their highest levels since August. In addition to Business activity expanding sharply, with nearly a quarter of firms reporting higher output.
Qatar:
New orders expanded for the 11th month running. Similarly to the UAE, PMI improvement has been modest, increasing by 0.1 points to 52.9. Wholesale, retail and manufacturing recorded the strongest demand improvements.
Companies are rebuilding inventories, with the expansion rate being the fastest since May, average lead times shortened since.
Although backlogged work only improved marginally, the silver lining is that there is sustained demand for new business, and outstanding business decreased for the first time in 3 months.
Stocks of purchases and a softer improvement in suppliers’ delivery times increased. Looking ahead, it is likely that shorter delivery times will become less common, and firms will continue their inventory restocking patterns ahead of the busy season.
Kuwait:
PMI rose to 55.9, up 3.2 points from October, increasing for the third month in a row.
Non-oil output has now increased for 22 months running. Kuwait is ending the year strong, as production output and new orders rose at second sharpest rates on record.
Firms are ramping up purchasing to keep on top of current order requirements . Evidently as the rates of increase in purchasing activity and stocks of inputs were the sharpest on record, as did inventories, this activity will only increase in intensity ahead of the busy season.
Suppliers’ fulfillment and delivery times shortened again. However, the fact that backlogs of work continued to rise despite these efforts suggests that further increases in output will follow in the months ahead.
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