Behind the Numbers, Supply-Chain Chaos Masks Extent of Gulf Pain - Bloomberg:
Supply disruptions that came with the global coronavirus pandemic are obscuring the distress among businesses in the two biggest Gulf Arab economies.
Longer delivery times, usually a sign of stronger demand, pushed up the latest readings of operating conditions in the non-oil private sector economies of Saudi Arabia and the United Arab Emirates, according to IHS Markit. Its Purchasing Managers’ Index for Saudi Arabia actually improved slightly in April, while a similar gauge for the U.A.E. declined less than in March. Both remain below the threshold of 50 that separates growth from contraction.
But the signs of improvement could be deceptive. It was a supply shock that caused longer delivery times, as delays in shipping and shortages of products followed efforts to contain the virus, according to IHS Markit.
“Longer suppliers’ delivery times are typically seen as an advance indicator of rising demand for raw materials and therefore have a positive influence on the PMI index,” IHS Markit said in its report on Saudi Arabia.
Supply disruptions that came with the global coronavirus pandemic are obscuring the distress among businesses in the two biggest Gulf Arab economies.
Longer delivery times, usually a sign of stronger demand, pushed up the latest readings of operating conditions in the non-oil private sector economies of Saudi Arabia and the United Arab Emirates, according to IHS Markit. Its Purchasing Managers’ Index for Saudi Arabia actually improved slightly in April, while a similar gauge for the U.A.E. declined less than in March. Both remain below the threshold of 50 that separates growth from contraction.
But the signs of improvement could be deceptive. It was a supply shock that caused longer delivery times, as delays in shipping and shortages of products followed efforts to contain the virus, according to IHS Markit.
“Longer suppliers’ delivery times are typically seen as an advance indicator of rising demand for raw materials and therefore have a positive influence on the PMI index,” IHS Markit said in its report on Saudi Arabia.
No comments:
Post a Comment