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January 2019

Gulf Industry Magazine helps you catch up with the numbers behind economic and industrial developments in the region.

Saudi’s non-oil growth hits 11-month high

SAUDI ARABIA’S non-oil private sector witnessed its fastest growth rate in 11 months in November, according to the latest data from the Emirates NBD Purchasing Managers’ Index (PMI) for the kingdom.

The survey, sponsored by Emirates NBD and produced by IHS Markit, a world leader in critical information and analytics, contains original data collected from a monthly survey of business conditions in the Saudi Arabian private sector.

Khatija Haque, head of Mena Research at Emirates NBD, said: “The headline Emirates NBD Saudi Arabia Purchasing Managers’ Index (PMI) rose to 55.2 in November from 53.8 in October, the highest reading this year. However, the PMI in November is still below the series average of 57.7, and the year-to-date average is lower than it was for Jan-Nov 2017, indicating a relatively soft rate of expansion in the non-oil private sector by historical standards.”

“Both output and new orders increased at a faster rate in November, and while new export order growth was firmer in November than it has been in recent months, it remained sluggish.  The recovery in new orders thus likely reflects stronger domestic demand.  However, some of the rebound in new order growth appears to be on the back of price discounting as well as increased marketing.

“Many firms surveyed indicated that competition for new work was strong, and as a result, selling prices were marginally lower on average last month.  Firms also indicated that they were increasingly focused on cost-savings.Firms remained strongly optimistic about their output in the coming year, citing planned new products, increased marketing and more competitive prices; however, the ‘future output’ index slipped 2 points in November from the October peak,” she added.

 

Mena printing business ‘to hit $32bn in 2019’

THE total value of the commercial print business in Mena is forecast to reach $32billion in 2019, according to exclusive research from Smithers Pira, a worldwide authority on the packaging, print and paper supply chains.

The report was released ahead of the 2019 edition of Gulf Print & Pack, the leading industry event for the commercial print and packaging industry in the region, running from April 15 to 18 at Dubai World Trade Centre.

“The Mena region presents a vast opportunity for companies in the commercial printing business, which the report estimates will grow by 6.2 per cent by next year. This is way ahead of the growth rate for the world print market, which, at 1 per cent is struggling to adjust to declines in demand for traditional print products as media products become increasingly digitised,” said Andy Thomas-Emans, strategic director at Tarsus Group, which organises the biennial Gulf Print & Pack.

The report further identified a number of strategic trends that will influence the print business in Mena in 2019.Inkjet will remain the region’s fastest growing print technology, with a compound annual growth rate (CAGR) of 12.7 per cent. This is followed by electrophotography and gravure.

“This shows that the region still has a huge untapped market for digital technologies that could spur the growth of the industry in the future,” added Thomas-Emans.

Xerox, a long-time exhibitor at Gulf Print & Pack, sees the Middle East region as one of the most strategically important markets for the company and considers the trade show to be a great platform for strengthening its customer and partner relationships as well as showcasing the brand’s latest offerings.

 

Mena personal care sector set for 8.5pc growth

THE beauty and personal care industry in the Mena region, valued at $15.9 billion, is set to grow twice as faster than the rest of the world with a compound annual growth rate (CAGR) of 8.5 per cent in the next three years, a report said.

Meanwhile the global industry, which is worth $444 billion, is estimated to grow at 4.2 per cent per annum, added the latest Mena Beauty Care Report from Dubai-based Millennial Capital, an emerging venture capital firm specialising in developing partnerships with global brands in the consumer, retail and wellness sector which target to enter or operate in the GCC market. The report cited reasons of high spending per capita, affordable prices, strong consumer confidence, high literacy rates, young population with a high social media exposure and on top of that new entrants with the aim to fill the gap.

Among the key categories that contribute most of the beauty and personal care market size are skincare, haircare, colour cosmetics, fragrances and men’s grooming. Globally, the Skincare category dominates the market and as a brand, L’Oréal Group captures the largest market share. Contrary to global trends, fragrances is the most loved category in the Mena region. The same is evident from the fact that two local brands, Arabian Oud and Al Qurashi, control over 20 per cent of the market share due to their appeal to the local masses and cultural significance.

While Saudi Arabia retains the highest market share of 33.2 per cent in the Mena region, the UAE stands higher in terms of spending per capita at $239. Despite the fact that UAE constitutes only 2 per cent of the Mena population, the high spending per capita is a result of the strong consumer confidence, high literacy rates and predominantly young population with a high social media exposure. There is great opportunity for new players with the right value proposition to step in and gain market share weighing on the gradually shifting consumer focus to quality products that not just pamper and protect, but also pay attention to cleaner and more organic ingredients, along with personalised offerings so that wider audiences can love and appreciate them just as much, according to the report.

 

Retail sales across Gulf states to grow by $24bn

RETAIL sales across four Gulf countries are projected to increase by more than $24 billion over the next five years, with the UAE expected to lead this trend with an estimated growth rate of 16 per cent, according to new research from Euromonitor International.

The report reveals that Kuwait, Oman, Saudi Arabia and the UAE are all set to capitalise on the rise of consumerism thanks to favourable demographics, a rise in population and a strong growth trajectory in tourism and per capita income.  

The research indicates that the retail industry in the UAE is currently worth $55 billion and is forecast to steadily rise to $63.8 billion by 2023. 

Store-based retailing will continue to dominate, accounting for $52.7 billion of the overall market in the UAE, however, non-store retailing, which includes online shopping, direct selling, mobile internet, social media and home shopping, will grow by 78 per cent from 2018 to 2023.

The value of non-store retailing is also forecast to increase across all four Gulf markets between 2018 and 2023, with Saudi Arabia expected to account for the biggest growth of 93.5 per cent, followed by Oman (68 per cent) and Kuwait (48 per cent).




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