Job growth in Saudi Arabia hits 9-year high

Riyadh Bank’s purchasing managers’ index in Saudi Arabia showed a marked increase in employment during October at non-oil economy companies in Saudi Arabia.

According to the index released on Sunday, the strong rise in new business has helped a marked expansion in activity, leading to the largest improvement in job numbers in nine years.

Companies surveyed reported that strong demand and strong production forecasts led to the need to increase staff numbers, as a result of which total staff numbers rose to the highest level since October 2014.

Strong labor market conditions helped a faster increase in wages, adding to the cost pressures of production supplies as purchasing prices accelerated, but companies slashed sales prices for the second consecutive month with other reports that strong competition eroded market share.

The main reading is Riyad Bank’s seasonally adjusted Purchasing Managers Index (PMI), which is an average of five indicators: new orders of 30%, production of 25%, employment of 20%, suppliers’ delivery dates of 15%, and purchasing stock of 10%.

The main purchasing managers’ index rose for the second consecutive month in October, rising from 57.2 points in September to 58.4 points in October, with the reading being the highest since June and indicating a significant improvement in the conditions of the non-oil private sector in Saudi Arabia.

Business activity continued to grow at a remarkable rate at the beginning of the fourth quarter, in response to growing currency demands and improved economic conditions, and companies reported a sharp increase in new incoming businesses as the expansion rate improved to its highest level in 4 months.