Saudi unemployment tumbles as more women join workforce

Reuters/Susan Baaghil

• Unemployment fell 3 percentage points to 8% in 2022
• Jobless rate for women fell from 22.5% in 2021 to 15.4% last year
• Number of Saudi workers in private sector rose from 1.9m to 2.2m

Unemployment in Saudi Arabia has fallen to 8 percent, its lowest level for six years, as the kingdom’s non-oil economy recorded strong growth in 2022.

The rate dropped by 3 percentage points in 2022, according to the General Authority for Statistics and analysts expect it to fall further this year.

“As we expect higher growth rates in the coming years and more sectors are expanding, more job opportunities should be available for Saudis,” said James Reeve, chief economist at Jadwa Investment.

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Reeve expects the unemployment rate to dip to 7.8 percent by the end of 2023. Economic growth is also forecast to slow after hitting record levels in 2022.

The number of Saudi nationals working in the private sector has risen by 15 percent, according to official statistics, from 1.9 million in 2021 to 2.2 million in 2022. 

Reeve told AGBI: “The rise of Saudis in the private sector is driven by the economic diversification efforts in line with Vision 2030, which aims to create new sectors and expand relatively smaller ones. 

“For example, tourism, which is mostly run by private companies either in accommodation or entertainment services, has attracted many young Saudis to work in the past few years – and the potential is still high for more.”

The overall decline was also driven by a big drop in female unemployment, which fell by just over 7 percentage points to 15.4 percent in 2022. Male unemployment dipped too, reaching 4.2 percent.

However, unemployment among young people aged 15-24 edged up to 16.8 percent in 2022. 

Three sectors recorded the largest annual rise in the hiring of Saudi nationals: administrative and support services (which includes rental and leasing services, travel agencies, landscape and building services); professional and technical services (which includes legal services, accounting, architecture and engineering, marketing); and construction.

Together these three sectors accounted for 56 percent of total new Saudi hires in 2022, according to the General Authority for Statistics.

Total labour force participation edged up to 52.5 percent in 2022.

The number of expatriates in the job market rebounded in 2022 to pre-Covid levels. The total stood at 7.3 million, up from 6.4 million at the end of 2020, with the majority of new joiners in the construction and agriculture sectors.

Construction activity in the kingdom was the highest in the world in the final quarter of 2022, according to the UK's Royal Institution of Chartered Surveyors. Last year the value of giga-project contracts awarded across the country doubled to $24.6 billion.

Accommodation and food services accounted for another 10 percent of new Saudi hires in 2022, with the total number of Saudi nationals in this sector rising by 30 percent year-on-year. 

Jadwa said the wholesale and retail sector recorded the largest expat departures over the year, which analysts attributed to localisation initiatives by the Ministry of Human Resources and Social Development in cinemas, shopping malls and jewellery shops. 

The non-oil sector is expected to grow by 5.5 percent in 2023 and 5.6 percent in 2024, according to Jadwa. 

Its analysts said: “The continuous growth in tourism activities around the kingdom has attracted many Saudi job seekers to work in various venues such as hotels, restaurants, entertainment companies, museums and others.

"In addition, expanding sectors such as transport would also add more opportunities, whether in new projects or expanding ones.”