Business News/ News / World/  Saudi Arabia sees biggest jobs growth in almost 5 years

Saudi Arabia saw the strongest increase in employment in almost five years  as non-oil companies enjoyed a sharp expansion in business activity at the end of 2022, according to a survey of purchasing managers compiled by S&P The upturn in business activity fuelled an increase in employment that was the strongest seen for nearly five years.

The Riyad Bank Saudi PMI stood at 56.9 in December, well above the 50-mark separating growth from contraction. The gauge reached 58.5 in November, the highest reading in more than seven years.

“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. We see operating conditions remaining favourable in December, characterized 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," said Naif Al-Ghaith PhD, Chief Economist at Riyad Bank.

"December data points to a continuous growth for the fourth quarter with optimism on the upcoming year. This made us comfortability project growth of non-oil GDP to exceed 4% in 2023."

According the the survey, the PMI upturn was the result of another strong increase in business activity, although the rate of growth eased from November's over seven-year high. 

“Firms mainly linked the rise in activity to higher sales and improving market demand. Concurrently, new order inflows rose sharply, with 30% of surveyed firms reporting growth compared to one month ago. While sales rose in all four monitored sectors, the upturn was strongest among service providers. Firms also reported a sharp increase in new orders from abroad, which panellists often attributed to higher demand from other GCC countries," the survey said. 

With sales growing, the survey said, Saudi Arabian firms expanded their employment numbers in December in order to boost operating efficiency. The rate of job creation was the fastest recorded in almost five years. The increase in staffing capacity helped companies to lower outstanding work for the seventh month running, although the rate of reduction was the softest since June.

Prices charged by companies increased at the fastest rate in nine months in December, as firms saw a need to pass increased expenses onto clients. (With Agency Inputs)


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Updated: 03 Jan 2023, 04:10 PM IST
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