Saudi private sector growth flatlines, labor market remains gloomy

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Saudi private sector growth flatlines, labor market remains gloomy

On Sunday, the 5th of May 2019, a monthly survey company data of Saudi Arabia had revealed that the country’s non-oil private sector remained unchanged last month, however, an increased business confidence followed by Saudi bourse’s listing on Russel’s FTSE index of Emerging Market and a strong demand could not be rendered into job creation.

According to the data released on Sunday (May 5th), Emirates NBD Saudi Arabia Purchasing Managers’ index (PMI) remained unchanged to a seasonally adjusted 56.8 last month, while a reading above 50.0 indicates an expansion and a figure below 50.0 points towards a contraction.

Although Saudi Arabia’s private sector’s growth had been struggling last year due to a robust rise of fuel price and an introduction of a five percent value added tax (VAT) alongside higher costs for hiring foreign workers, private sectors’ growth had surged this year.

After reaching a 13-month high on last January, Saudi’s private sector growth had continued to pick up pace, however, the gains had been marginal during February and March. Citing that there had been no meaningful growth on Saudi economy on April, head of MENA research at Emirates NBD, Khatija Haque said, “The headline PMI was unchanged at 56.8 last month.

Output and new order growth remained firm, but there has been no meaningful growth in private sector employment over the last three months”.