Saudi Arabia’s businesses are hiring again as economy records small gains

Dubai: Saudi Arabia’s employment numbers have made a welcome return to growth for the first time since January, giving enough confidence that the economy will close out the year on a relative high. After a harrowing first-half brought about by the COVID-19 spread, businesses can take a lot of heart from the modest turnaround.

“A third successive [monthly] rise in the Saudi Arabia PMI (Purchasing Managers’ Index) pointed to an economy getting back on its feet in November,” said David Owen, Economist at HIS Markit, the agency that tracks private sector spending and other indicators. “Supported by output and new business growth reaching ten-month highs, the data suggests a strong end to the year for the non-oil private sector.”

But there’s still lots of work to be done to make up for the lost months. The output, new orders and employment figures are all still below pre-COVID-19 times.

Getting jobs back

For now, however, businesses will savour the gains from the last three months. Plus what’s being achieved on employment, as government-led stimulus and relief efforts record a measure of success.

“Notably, employment started to rise, while business confidence strengthened in the wake of encouraging vaccine news and sharper demand growth,” said Owen. “As a result, there was evidence of firms raising investment in anticipation of an uplift in 2021 should the pandemic come to an end.”

Higher employment numbers attest to “rising demand, despite a further modest drop in outstanding work”.

PMI reading

The November’s score for the PMI was at 54.7, a sharp improvement on the 51 from October. (Anything over 50 signifies positives.)

This signals the “strongest improvement in business conditions since January,” the update from IHS Markit notes. “The index has now registered above the 50.0 no-change mark for three months in a row, highlighting a sustained recovery after the economic downturn due to COVID-19.”