Saudi non-oil sector employment increases amid sustained growth – PMI

A view shows vehicles driving on a street in Riyadh, Saudi Arabia on February 16, 2021. REUTERS / Ahmed Yosri

DUBAI, July 5 (Reuters) – Saudi Arabia’s non-oil private sector continued to expand at a rapid pace in June and job creation peaked in 19 months, according to a survey, as the largest Arab economy is recovering from coronavirus crisis.

Saudi Arabia’s seasonally adjusted IHS Markit Purchasing Managers Index (PMI) stood at 56.4 in June, unchanged from May, maintaining its fastest growth rate since January.

An increase in new orders, the fastest in five months, boosted business activity, reflecting the easing of coronavirus restrictions.

Input prices continued to rise, but at a slower pace than in May, suggesting inflationary pressures may have peaked.

“Demand growth in Saudi Arabia’s non-oil sector picked up again in June, with the latest data signaling the biggest sales increase since January,” said David Owen, economist at IHS Markit.

“It was also encouraging to see a slight slowdown in headline input price inflation for the first time in 2021 so far… This can be attributed to the relative strength of domestic supply chains, which have yet to been affected by global supply. difficulties, ”he said.

Confidence in future business activity has peaked in five months, with businesses hoping the economic recovery will accelerate further in the second half of the year.

Private sector expansion and job creation are at the heart of Saudi reforms aimed at diversifying the economy of the world’s largest oil exporter.

Employment in the non-oil private sector has grown at the fastest pace since November 2019, according to the survey.

This echoes recent official Saudi data which shows unemployment among Saudi citizens fell to 11.7% in the first quarter of this year, from 12.6% at the end of 2020. read more

Reporting by Davide Barbuscia; Editing by Toby Chopra

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