Employment Renaissance: Saudi Arabia Witnesses 9-Year High in Job Growth

Saudi Arabia is witnessing a significant uptick in employment, registering the highest growth in nine years. This growth is fueled by an accelerated growth in non-oil business activities for the second consecutive month as of October. The rise is notably propelled by an influx of new orders, which has generally spurred business activity. This led , leading to a substantial employment boost, according to the Riyadh Bank Purchasing Managers’ Index (PMI).

Economic Indicator: Riyadh Bank PMI

The PMI, a vital indicator of the economic health of the manufacturing sector, rose seasonally adjusted to 58.4 in October from 57.2 in September. This figure is significantly above the threshold level of 50, indicating growth, and marks the highest reading since June. The sub-index for new orders climbed to 66.1 in October, a peak in four months, from 64.2 the previous month, signaling faster business growth.

Growth Across Various Sectors

The survey demonstrated growth across most sectors, including manufacturing and construction. While production growth remained high, the sub-index receded to 60.1, slightly weaker than the long-term trend, yet reflecting a positive economic trajectory.

Expert Insight: Analysis by Riyadh Bank’s Chief Economist

Naif Al-Ghaith, the chief economist at Riyadh Bank, pointed out that the surge in new orders indicates market expansion, underlining sustainable growth within the non-oil sector and an increased demand for its products. He added, “The employment growth is a promising sign for the Saudi economy, signifying a rising demand for labor and potential improvement in the job market.”

Employment Boost: A Look at the Numbers

The employment sub-index rose to a nine-year high of 54.5 in October from 52.0 in September. This indicates a positive shift in the labor market. The Kingdom is working to boost job opportunities in the expanded private sector. This effort aligns with the government’s priority under the extensive Vision 2030 economic plan. Crown Prince Mohammed bin Salman is spearheading this initiative.

Vision 2030: Steering Towards Diversification

Saudi Arabia’s Vision 2030 is a strategic framework aimed at reducing the country’s dependence on oil by diversifying its economy and developing public service sectors such as health, education, infrastructure, recreation, and tourism. The initiative also envisions creating a broader investment base and more job opportunities, particularly in the private sector, to improve the living standards of citizens.

Future Projections: The Non-Oil Economic Sector

Amidst these transformative efforts, the Saudi government anticipates the non-oil economic sector to grow by around six percent in 2023, significantly outpacing the overall growth in Gross Domestic Product (GDP). This positive outlook underscores the nation’s ongoing shift towards a more diversified economic model, less reliant on oil revenues.

Optimistic Outlook

Even though confidence in future production slightly declined compared to the previous month, companies remained generally optimistic.

The current economic momentum is driven by growth in non-oil business activities. This has led to a rise in employment. It aligns well with the Kingdom’s economic diversification goals. It shows a growing private sector and a more balanced economic structure. This fosters a sustainable growth pathway. It also enhances the job market’s robustness. Both are crucial for realizing the ambitious Vision 2030 objectives.

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