Said Al-Shaikh, group chief economist and Sharihan Al-Manzalawi, economist at the National Commercial Bank, address a press conference in Jeddah on Wednesday.

Dun & Bradstreet South Asia Middle East Ltd. (D&B) in association with the National Commercial Bank (NCB) released the D&B Business Optimism Index (BOI) survey for Saudi Arabia for Q4 2015. The BOI survey reveals lower optimism levels for the Kingdom’s firms.

Crude oil prices are expected to remain flat during the fourth quarter, with the OPEC’s decision to keep pumping to maintain its market share and lackluster global demand.

The IMF downgraded its global economic outlook once again, from its previous forecast of 3.3 percent to 3.1 percent for 2015.

According to the IMF, a slowdown in emerging markets is pushing the world economy into its weakest expansion since the financial crisis. Modest growth in the United States and a meager recovery in the euro zone, meanwhile, have not been able to offset falling output in emerging markets.

Since the beginning of August, the OPEC basket has remained below $50 per barrel, pressured by various factors. Softening economic growth in China, highlighted by subdued PMI manufacturing numbers, the huge stock market sell-off and loss of confidence in its petroleum consumption have led to a bearish sentiment in the market.

US crude oil inventories are near 80-year highs, with the commercial crude stock at over 454 million barrels.

Another factor pressuring oil prices is the Iran Nuclear Deal and the new supply that will be coming into the market as a result, although the impact of the deal is still uncertain as estimates of Iran’s production potential vary greatly.

Despite low oil prices, Saudi Arabia has maintained crude oil production above 10 million bpd as it hopes lower oil prices will stimulate Asian demand and hit rival production in the United States that is expensive to produce.

Sharihan Al-Manzalawi, economist of the NCB, commented: “While the Kingdom’s business sector continues to be moderate due to the sharp fall in oil prices, the BOI for the non-hydrocarbon sector edged down in Q4 2015.

The trade and hospitality segment is the most optimistic for Q4 2015, while the transport sector holds the weakest outlook. But, as expected, the BOI for the hydrocarbon continues to deteriorate since the fourth quarter of last year.

In line with the cautious outlook, the views of the business environment is only slightly less optimistic as 49 percent of the participants cited no negative factors in the final quarter of 2015 compared to 53 percent in Q3,2015.

The survey for Q4 2015 shows that oil and gas firms in Saudi Arabia are cautious about the outlook for the fourth quarter, with the composite BOI slipping into negative territory and recording the lowest level since the beginning of the series.

The trade and hospitality sector’s business outlook for Q4, 2015 has strengthened from the previous quarter.

The forecast for the finance, real estate and business services sector has weakened both on a quarterly and annual basis.

The manufacturing sector’s outlook for Q4, 2015 has moved back in comparison to the previous quarter’s forecast and also with respect to the fourth quarter of 2014.

The construction sector’s composite BOI has dropped to 31, the lowest level in the series since Q3, 2009, when it stood at 30. Business expansion plans among Saudi businesses have strengthened.

Rajesh Mirchandani, CEO, Dun and Bradstreet South Asia Middle East Ltd, commented: “Firms in Saudi Arabia continue to witness lower optimism levels. The BOI score for the hydrocarbon sector stands at -4, the lowest in the series. In line with the cautious outlook, sentiments with reference to the business environment have also deteriorated with 49 percent expecting no obstacles to their business operations during Q4, 2015 compared to 53 percent in Q3, 2015.”

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