RIYADH: Saudi Arabia’s job numbers witnessed their strongest growth rate since January 2018, as non-oil companies witnessed a sharp expansion in business activity driven by robust market demand and business intake, according to a report.
The latest Riyad Bank Saudi Arabia Purchasing Managers Index report noted that the Kingdom’s headline PMI stood firmly above the 50.0 no-change mark at 56.9 in December 2022 — a slight decline from November when the index hit 58.5.
In October, Saudi Arabia’s PMI was 57.2, while in September, it was 56.6.
According to the index, released by S&P Global, readings above the 50-mark show growth, while those below 50 signal contraction.
The report noted that the rate of job creation was the fastest recorded in almost five years in December 2022, and the increase in staffing capacity helped companies to lower outstanding work for the seventh month running, although the rate of reduction was the softest since June.
“Job creation in the non-oil sector has never been this strong in almost five years. This is attributed to the ongoing reforms that support the private sector under the Saudi Vision 2030,” said Naif Al-Ghaith, chief economist at Riyad Bank.
He added: “We see operating conditions remaining favorable in December, characterized by rapid growth in the non-oil activities and a robust labor market by the end of 2022, with both jobs and wages having far more momentum than previously thought.”
According to the report, new order inflows rose sharply, with 30 percent of surveyed firms reporting growth compared to one month ago.
“Firms also reported a sharp increase in new orders from abroad, which panellists often attributed to higher demand from other Gulf Cooperation Council countries,” said Riyad Bank in the report.
Al-Ghaith further noted that the PMI figures in December indicated strong optimism for 2023, with non-oil GDP growth projected to grow by 4 percent.
“All in all, December data points to continuous growth for the fourth quarter with optimism for the upcoming year. This made us comfortability project growth of non-oil GDP to exceed 4 percent in 2023,” he added.
The report further pointed out that the prices charged by non-oil firms rose steadily and at the fastest pace for nine months in December, as firms often cited the need to pass increased expenses onto their clients.
Al-Ghaith noted that prices are expected to decrease in 2023 due to the anticipated drop in international prices caused by the high-interest rate and recovered supply chains.
