Saudi: Employment in non-oil sector rises at strongest pace since 2018
Hiring at companies in Saudi Arabia’s non-oil sector increased at its strongest pace in about five years in December, driven by “robust” business activity.
The reading on the Riyad Bank Saudi Arabia purchasing managers’ index came in at 56.9 last month, slower than the 58.5 recorded in November, but still well above the neutral 50 mark that separates growth from contraction.
Despite the lower headline reading, businesses linked the rise in activity to higher sales and improving market demand, with new order inflows rising sharply and 30 per cent of surveyed companies reporting growth, compared with the previous month.
The acceleration in sales growth drove businesses in the kingdom to increase hiring in December to boost operating efficiency.
The rate of job creation was the fastest recorded since January 2018, while the increase in staffing capacity helped companies to reduce outstanding work for the seventh month running.
“Job creation in the non-oil sector has never been this strong in almost five years. This is attributed to the ongoing reforms that support the private sector under the Saudi Vision 2030,” said Naif Al-Ghaith, chief economist at Riyad Bank.
“We see operating conditions remaining favourable in December, characterised by rapid growth in the non-oil activities and a robust labour market by the end of 2022, with both jobs and wages having far more momentum than previously thought.”
Saudi Arabia’s preliminary estimates for 2023 indicate a real gross domestic product growth rate of 3.1 per cent, after an expected expansion of 8.5 per cent last year, Finance Minister Mohammed Al Jadaan said last month as the government approved the budget for this year.
The kingdom will continue to spend on major projects and programmes related to its Vision 2030 economic transformation plan that seeks to diversify the Arab world’s largest economy and reduce its reliance on hydrocarbons, Saudi Crown Prince Mohammed bin Salman said last month.
The Vision 2030 programme aims to boost the kingdom’s manufacturing, tourism, technology and entertainment industries and open up capital markets to foreign investors.
