Strongest Saudi Non-Oil Pickup in Years Can't Break Jobless Funk
Strongest Saudi Non-Oil Pickup in Years Can't Break Jobless Funk
(Bloomberg) --
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 labor 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.”
To contact the reporter on this story: Paul Abelsky in Dubai at pabelsky@bloomberg.net
To contact the editors responsible for this story: Lin Noueihed at lnoueihed@bloomberg.net, Paul Abelsky, Amy Teibel
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