Saudi non-oil economy sees fastest growth for 4 years

Unemployment in Saudi Arabia has continued to lag a rebound in non-oil growth this year to the fastest since 2015

By Arabian Business

 

The wait for new jobs in Saudi Arabia drags on even though its non-oil economy hasn’t felt better in years.

While business conditions in the kingdom’s non-oil private sector improved last month at the fastest pace since August 2015, employment gains were slower compared with September and average staff pay even showed a “marginal fall,” according to IHS Markit.

By contrast, IHS Markit’s Purchasing Managers’ Index for the neighboring United Arab Emirates was unchanged at its lowest level in almost a decade, but employment actually rose for the second consecutive month in October.

“Growth momentum continued to build during October” in Saudi Arabia, Amritpal Virdee, economist at IHS Markit, said in a report. “However, employment growth was marginal.”

Unemployment in Saudi Arabia has continued to lag a rebound in non-oil growth this year to the fastest since 2015, a reflection of the persistent weaknesses in business confidence that’s been made worse by a string of fiscal reforms such as new taxes and fees.

Joblessness among nationals has held above 12% for the past three years, especially testing the patience of young Saudis entering the labour market in increasing numbers.“Firms operating in Saudi Arabia’s non-oil economy remained reluctant to take on additional staff,” IHS Markit said in the report. “According to anecdotal evidence, extra staff were recruited in order to fulfill company expansion plans.”

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