Saudi Non-Oil Economy Boosted by Fastest Job Growth in 9 Years

Saudi Arabia’s non-oil economy saw its fastest job growth in nine years in October, signaling another improvement in business conditions as the world’s biggest crude exporter seeks to diversify.

The Riyad Bank purchasing managers index for Saudi Arabia rose to 58.4 in last month from 57.2 in September. The gauge was well above the 50-mark separating growth from contraction and “indicative of a substantial upturn in the health of the Saudi Arabian non-oil private sector,” the report said.

The sharpest rise in employment growth since October 2014 came as companies sought to add to their staffing capacity after strong demand for new orders.

“The employment expansion is a promising sign for the Saudi economy, as it suggests a growing demand for labor and a potential improvement in the job market,” said Naif Al-Ghaith, chief economist at Riyad Bank.

The strong PMI numbers for October follow official figures for the third quarter of the year indicating that private sector growth was losing steam. Non-oil economic output growth slowed to 3.6%, according to data released last week. On a quarterly basis, it rose 0.1%, the softest pace of acceleration since the end of 2020.

The $1.1 trillion economy suffered its biggest contraction since 2020 during the third quarter, after the kingdom cut oil production in July in a bid to push up prices.

Backlog order volumes decreased at the sharpest rate since August 2022, according to the PMI data. That was driven by increased hiring, as well as “supportive government policies and subsequent improvements in the ease of doing business,” according to the report.

Source from: Bloomberg