Saudi Arabia business sentiment soars as non-oil sector sees job growth: October PMI
Jobs growth hits nine-year high as output and new orders continue to strengthen
Saudi Arabia's non-oil sector experienced a significant increase in employment in October, according to Riyad Bank Saudi Arabia Purchasing Managers’ Index (PMI). This growth in employment was driven by a stronger rise in new business activities, resulting in the most substantial increase in job numbers in nine years.
The robust labor market conditions also led to higher wages, contributing to increased input costs due to rising purchase prices. However, companies lowered their selling charges for the second consecutive month, citing strong competition eroding market share as a key reason.
Naif Al-Ghaith PhD, Chief Economist at Riyad Bank, said, “In October, the Riyad Bank PMI surged to 58.4, indicating robust growth in the non-oil sector. This positive development was primarily driven by the significant rise in employment levels, reflecting increased hiring activity and a boost to the workforce."
He added, "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.
The headline figure in the report, the Riyad Bank Saudi Arabia PMI, rose for the second consecutive month in October, reaching 58.4, the highest level since June. This uptick reflects a substantial improvement in the overall health of Saudi Arabia's non-oil private sector.
Business activity continued to grow at a marked rate in the beginning of the fourth quarter, driven by higher client orders and improved economic conditions. Moreover, companies saw a sharp increase in new business opportunities, with expansion rates reaching a four-month high. This growth was observed across various sectors, including manufacturing, construction, wholesale & retail, and services.
The survey data also highlighted a significant increase in hiring across the non-oil private sector. Businesses attributed this to strong demand and optimistic output expectations, resulting in the most substantial employment growth since October 2014.
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