Finance

Saudi employment hits 9-year high as businesses thrive

By Pramod Kumar

November 5, 2023, 5:42 AM

Saudi women entering the workforce tend to have higher educational qualifications than their male counterparts, suggesting they may secure well-paid jobs — A steep uplift was seen in hiring activity across the non-oil private sector, driven by robust demand and output expectations

Strong businesses in the Saudi Arabian non-oil economy led to an increase in employment during October, which reached a nine-year high, Riyad Bank said in its latest PMI report.

Business activity continued to grow for the fourth quarter due to higher client orders and strengthening economic conditions.

A steep uplift was seen in hiring activity across the non-oil private sector, driven by robust demand and output expectations. Subsequently, overall employment rose to the sharpest level since October 2014, with the subindex rising to 54.5 in October from 52.0 in September.

Strengthening labour market conditions underlined a faster wage increase, leading to input cost pressures as purchase price inflation accelerated. Nevertheless, companies reduced their selling costs for the second month in a row on further reports of intense competition.

The headline PMI rose for the second consecutive month in October, reaching 58.4 from 57.2 in September. The reading was the highest since June and indicative of a significant upturn in the health of the local non-oil private sector.

The growth in output and new business was spread across most sectors, including manufacturing and construction.

“The surge in new orders signifies an expanding market and suggests that the non-oil sector is experiencing sustained growth and demand for its products,” stated Naif Al-Ghaith, chief economist at Riyad Bank.

“The employment expansion is a promising sign for the Saudi economy, as it suggests a growing demand for labour and a potential improvement in the job market.”

Last week, the Saudi finance ministry said that the budget deficit reached SAR44 billion ($11.73 billion) in the first nine months of 2023 as oil revenue dropped sharply on lower prices and extended voluntary cuts, the finance ministry said.

Oil revenue hit SAR505.4 billion, falling 24 percent year on year. On the other hand, non-oil revenue reached SAR349 billion, rising 21 percent year on year.