Non-oil business activity picks up in Saudi Arabia and UAE

Non-oil business activity in Saudi Arabia and the UAE picked up quickly in February, according to new data.

The kingdom’s economy rose at its fastest rate in five months, reaching its highest level since September 2023 following a slump to a two-year low in January, according to Riyad Bank. Expectations towards future activity were buoyed, while supply chains remained supported despite ongoing conflict in the Red Sea.

Meanwhile in the UAE, the latest index from S&P Global noted the fastest upturn since June 2019, as 38% of monitored firms noted a month-on-month increase in activity from new business, stronger client activity and more marketing and development work.

Anecdotally, Dubai Mall — a landmark of the Gulf’s economic diversification efforts — welcomed 105 million visitors in 2023, a 19% uptick from the previous year, making it “the most visited place on Earth in 2023,” according to its developer Emaar. 

The Weekly Circuit: Saudi Arabia’s non-oil business + The accidental grocer

👋 Hello from the Middle East!

Saudi Arabia’s non-oil business has propelled the kingdom to its swiftest job growth in nine years amid its continuing efforts to diversify its economy. October’s Riyad Bank purchasing managers index (PMI), released on Sunday, signaled that private businesses are contributing to growth, which slowed in the third quarter following oil production curbs that were implemented in July.

Saudi Arabia’s decision to constrict supply by 1 million barrels a day, together with Russia’s cut of 300,000 barrels, left the OPEC+ meeting in Vienna last June in disarray, coming on top of production curbs that the 23-member group adopted earlier in the year amid sagging oil prices and reduced demand from China, the world’s second-largest economy.

The UAE’s two-day annual meeting on national policy and goals wrapped up on Wednesday following sessions on artificial intelligence, hosting duties for the U.N.’s COP28 climate conference later this month and progress on the 50-year economic development plan known as Centennial 2071.
 
Some 500 dignitaries convened at the St. Regis hotel on Saadiyat Island in the largest government gathering of the year. The palm tree-lined beach enclave, connected by a bridge to downtown, is home to the Louvre Abu Dhabi – where works by Leonardo da Vinci and Edouard Manet hang – and the interfaith Abrahamic Family House.

WeWork entered a new chapter in its fall-from-grace saga as the SoftBank-backed firm sought U.S. bankruptcy protection on Monday. The debt-burdened startup that disrupted the multi-trillion dollar office space market sent an email to its 500,000 members overnight, offering reassurances that WeWork’s locations would remain open. It was signed by David Tolley, the CEO brought in last May to lead a turnaround.

With 660 locations in 119 cities worldwide, WeWork has kept a small footprint in the Middle East, opening only in the UAE and Israel, despite some of its biggest backers being from the Gulf. In 2017, Saudi Arabia’s Public Investment Fund and Abu Dhabi’s second largest sovereign fund Mubadala were the majority investors in SoftBank’s $93 billion Vision Fund I, pouring in $45 billion and $15 billion, respectively. Through the Vision Fund, SoftBank became WeWork’s biggest backer and today, it holds about a 60% stake in the embattled company. 

But there appear to be no hard feelings between Saudi Arabia and WeWork’s co-founder and former CEO Adam Neumann. The Israeli businessman appeared last month in Riyadh at the kingdom’s Future Investment Initiative — also known as “Davos in the Desert” — where he heard pitches from startup founders in the region and promoted his new real estate venture Flow. 

Welcome to The Weekly Circuit. Read on for the stories, deals and players driving the news across the MENA business landscape. Please send comments and story tips to [email protected].

Spread the word! Invite your friends to sign up.👇

READY TO EXPAND

An accidental grocer has valuable lessons for doing business in the UAE

Jones the Grocer is a UAE institution. Favored by the President, Sheikh Mohammed bin Zayed, it has served breakfast, lunch and dinner to a cast of famous faces, including Hilary Clinton and Tony Blair. With locations now scattered around Abu Dhabi, Dubai, Riyadh and Doha, it began as a rare spot in Abu Dhabi that felt like a neighborhood café, Erica Elkhershi reports for The Circuit.

Goodbye trendiness: Much of the food and beverage industry in the Gulf is dominated by fast-casual franchises in large shopping malls and high-concept restaurants inside five-star hotels. The Jones café-markets are, by contrast, airy, with blue-and-white tile and a pronounced lack of trendiness: upmarket but not designed for Instagram.

Dinner parties: The menu is comfort food-focused: grilled steaks, heaping sandwiches, hearty soups. Large open shelves display gourmet foodstuffs for sale like olive oils, jarred chutneys and marmalades and dark chocolate line the walls. Its charcuterie boards are the mark of a good dinner party in Abu Dhabi; their Thanksgiving turkeys are a favorite of American expats, while the Aussies and Brits lean on Jones to outsource their Christmas roasts. With revenue of over $50 million across all stores, it’s one of the UAE’s local success stories that is about to go global.

Click here to read the full story.

Share