Latest news with #Al-Ghaith
Gulf Insider
03-07-2025
- Business
- Gulf Insider
Saudi Businesses Add New Jobs At Fastest Pace In 14 Years: Riyad Bank PMI
Saudi businesses are continuing to add new jobs at top speed – but this is also leading to a 'record rise' in their wage costs. Across sectors, new jobs are seeing the 'sharpest rise' since May 2011, according to the latest PMI data. This is where the cost factor kicks in. 'This surge in demand for staff contributed to a record increase in wage costs, which added to overall cost pressures and led to a renewed rise in output prices,' according to a report by Riyad Bank. Adding to this is the cost of purchases, which in June rose at the fastest since February 2025, in part 'driven by stronger demand and rising geopolitical risks'. 'Despite these cost challenges, firms broadly raised their selling prices, reversing the declines seen in May and signaling an improved ability to pass on higher costs to customers,' said Naif Al-Ghaith, Chief Economist at Riyad Bank. The Saudi travel and tourism sector is, these days, one of the biggest hirers in the Kingdom, with the launch date of Riyadh Air coming closer on the horizon. According to hiring consultants, there is a whole slew of aviation facing businesses that are also adding to their payrolls. The Saudi non-oil economy saw its June PMI climb to 57.2 from 55.8 in May. The higher reading is 'supported by higher output levels, rising demand, and an active labour market', says Riyad Bank. 'Firms largely linked the pickup in activity to improving sales, new project starts, and better demand conditions, although the pace of output growth was softer compared to previous highs.' (The Purchasing Managers Index is a composite score that tallies business spending patterns, order intake and output, inventory levels as well as hiring. A score of 50 plus shows businesses in expansion drive.) 'Sentiment among non-oil businesses remains highly positive,' said Al-Ghaith. 'Confidence about future activity climbed to a two-year peak, supported by healthy order pipelines and stronger domestic economic conditions. 'However, cost pressures became more pronounced in June. Staff costs rose at a record pace as firms worked to retain talent, while purchase prices saw their fastest increase since February, partly driven by stronger demand and rising geopolitical risks.'
Arab News
05-05-2025
- Business
- Arab News
Saudi Arabia's non-oil sector growth continues in April as PMI hits 55.6
RIYADH: Saudi Arabia's non-oil private sector continued to expand in April, with the Riyad Bank Purchasing Managers' Index reaching 55.6, indicating sustained growth in business activity, a new survey showed. According to the latest Riyad Bank Saudi Arabia PMI report compiled by S&P Global, the April reading marked a slight drop from 58.1 in March but remained comfortably above the neutral 50.0 mark that separates expansion from contraction. Despite the marginal decline, Saudi Arabia's PMI for April was still higher than the UAE's reading of 54.0 and Kuwait's 54.2. Naif Al-Ghaith, chief economist at S&P Global Market Intelligence, said: 'As of April 2025, Saudi Arabia's non-oil economy continues to assert itself as a pivotal component of the nation's economic landscape.' He added: 'The diversification efforts have continued to bear fruit, underscoring the Kingdom's strategic shift away from oil dependency toward a more balanced and sustainable economic framework.' The PMI survey signalled a strong increase in employment levels across the non-oil private sector in April. The rate of hiring growth accelerated to its joint-fastest pace in ten and a half years, matching the level recorded in October 2023, as companies expanded their staffing capacity in response to rising sales and increased activity. As a result, staff cost inflation surged to a record high in April, reversing the slowdown in cost pressures seen in March. 'Employment in the non-oil private sector has been particularly vibrant. This surge in employment is a response to rising sales and increased business activity, prompting firms to expand staffing capacities,' said Al-Ghaith. The report added that business activity at Saudi Arabia's non-oil companies increased sharply at the start of the second quarter, with firms commonly reporting an expansion in output due to higher sales, new project approvals, and strong tourist numbers. 'While output growth remains robust, it is somewhat tempered by global economic uncertainties and competitive pressures affecting client spending. Nonetheless, employment figures continue to climb, indicating a sustained growth trend since last May,' added Al-Ghaith. He further noted that Saudi Arabia had successfully managed inflation compared to other nations, highlighting the Kingdom's effective control of domestic prices amid global uncertainties. The latest PMI data also signalled a steep increase in purchasing activity, with the growth rate reaching a three-month high. S&P Global noted that expectations among non-oil firms for output in one year's time increased slightly from March, although overall business optimism remained below the long-run survey average. Looking ahead, Al-Ghaith said the Kingdom's fiscal prospects remain positive for 2025. 'Forecasts suggest a 3 percent expansion in overall gross domestic product and a 4.5 percent increase in non-oil sectors, continuing the upward trajectory in non-oil activities,' said Al-Ghaith. He added: 'This growth is crucial for sustaining the economic transformation outlined in Vision 2030, which aims to foster diverse, innovative industries.'
Arab News
07-04-2025
- Business
- Arab News
Saudi non-oil growth holds firm in March with PMI at 58: S&P Global
RIYADH: Saudi Arabia's non-oil private sector maintained its resilience in March, with the Kingdom's Purchasing Managers' Index reaching 58.1, the highest among its Middle Eastern peers. According to the latest Riyad Bank Saudi Arabia PMI report compiled by S&P Global, non-oil private firms in the Kingdom witnessed a marked increase in new order volumes, although the growth rate softened further from the near 14-year record seen in January. The March figure represented a slight decline from the 58.4 seen in February, but it was still higher than UAE's PMI rating of 54, Kuwait's at 52.3 and Qatar's at 52. Any PMI reading above 50 signifies an expansion, while a reading below 50 indicates a contraction. The sustained momentum reflects the Kingdom's Vision 2030 strategy to reduce reliance on oil by accelerating growth in tourism, manufacturing, logistics, and financial services. Naif Al-Ghaith, chief economist at Riyad Bank, described the Saudi non-oil private sector as demonstrating 'significant resilience and growth,' adding: 'This reading reflects sustained positive momentum in business conditions, highlighting the sector's robust economic health and its vital role in the ongoing diversification efforts of the Kingdom as envisaged by Vision 2030.' Saudi Arabia's non-oil businesses continued to increase their employment at an elevated pace in March, driven by an upturn in demand. The report further said that staffing growth was little changed from February's 16-month high, as firms widely commented on efforts to build their sales teams and overall capacity. Survey data also indicated that job growth in Saudi Arabia's non-oil private sector during the first three months of this year was the fastest since the third quarter of 2012. 'Rising employment rates are a direct benefit of businesses scaling up operations to meet demand. By providing more job opportunities, Saudi Arabia aims to nurture a skilled and ambitious workforce, reducing the unemployment rate to 7 percent for Saudi nationals,' said Al-Ghaith. Speaking at the World Investment Conference in Riyadh last November, Saudi Arabia's Minister of Economy and Planning Faisal Al-Ibrahim said non-oil activities now account for 52 percent of the Kingdom's gross domestic product. He added that the non-oil economy has grown by 20 percent since the launch of Vision 2030. The latest PMI report added that greater marketing efforts, lower selling prices, and a broader improvement in economic conditions played a crucial role in driving sales growth among non-oil firms in Saudi Arabia in March. New orders from foreign markets also rose in March, although the rate of expansion slowed. Highlighting the affinity of Saudi Arabia's non-oil products in international markets, a report by the General Authority for Statistics revealed that the Kingdom's non-energy exports surged by 10.7 percent in January to reach SR26.48 billion ($7.06 billion). According to the latest S&P Global report, increased workforces and stronger new businesses supported a robust upturn in non-oil private sector activity during March. Non-oil firms in the Kingdom also engaged in additional stockpiling as they anticipate a sustained uplift in sales. Companies that took part in the survey revealed that purchasing activity rose sharply in March, leading to another steep increase in total inventories. 'The improvement in business conditions supports efforts to attract investment, increase the competitiveness of the Saudi economy, and enhance local business growth,' said Al-Ghaith. He added: 'This initiative is further supported by governmental enhancements in regulatory frameworks and infrastructure investments which pave the way for greater private and foreign investments.' Attracting international investments is one of the crucial goals outlined in Saudi Arabia's Vision 2030, with the Kingdom aiming to attract $100 billion a year in foreign direct investment by the end of this decade. The latest S&P Global report further said that suppliers' delivery times improved in March, with several panellists noting that strong vendor relationships had facilitated efficiency gains. However, some reports of supply disruption and administrative delays led to a much softer overall upturn in performance compared to February. This softening also hindered efforts to clear outstanding work, contributing to a renewed and sharp rise in total backlogs. In terms of pricing, the latest survey revealed that input cost pressures witnessed a marked easing in March. The report added that the rate of inflation dropped to its lowest level in just over four years, as firms saw a much weaker increase in purchase prices. Consequently, non-oil companies reduced their selling prices for the first time in six months. 'Sustaining and nurturing these positive trends, Saudi Arabia is laying the groundwork for a multifaceted and thriving economy that meets the aspirations of its people and the strategic goals of the nation,' said Al-Ghaith. 'With each uptick in the PMI and every incremental GDP growth, the Kingdom moves closer to realizing its ambitions of a diversified, sustainable economic future,' he concluded.
Gulf News
04-03-2025
- Business
- Gulf News
Saudi non-oil job growth at second fastest rate in 10 years: February PMI
Dubai: Saudi business optimism continues to ride high, at levels last seen in late 2023 as robust consumer demand led companies to raise capacity and prepare for growth opportunities. This has also led them to take in more employees, helping them to better handle higher output needs, according to the latest monthly PMI data from Riyad Bank. Cost of doing business was also running higher, but were compensated by higher asking prices. 'Saudi Arabia's non-oil economy remains on a solid growth path, with ongoing expansion in employment, efficient supply chains, and strong domestic and export demand pointing to sustained economic momentum,' Naif Al-Ghaith, Chief Economist at Riyad Bank. 'The underlying indicators suggest that the private sector remains well-positioned for continued expansion, supported by a positive outlook for business activity and market conditions.' How did Saudi businesses fare on jobs? There was a 'particularly strong rise' in employment across February. Survey data show the rate of job creation to be the 'second-highest in over a decade, outpaced only by October 2023'. 'Jobs growth was strongest in manufacturing and services, sectors which also observed the highest levels of confidence,' according to the Riyad Bank report. Based on feedback from Saudi business owners, there is ample liquidity in the market, with banks willing to help fuel expansion requirements. (But CEOs and lenders will also be taking a closer look at OPEC+'s decision to raise oil production and what this would mean for prices.) February PMI The Purchasing Managers Index for February came up with a score of 58.4, down slightly from the 60.5 a month earlier. (This was also the highest PMI tally for Saudi Arabia in a decade. A reading over 50 indicates the private sector in expansion mode, based on factors such as spending, production output, employee intake, etc.) 'Export demand continued to rise driven by strong demand from international markets, competitive pricing, and high product quality,' said Al-Ghaith. 'Although export growth softened slightly from recent months, it remained above average, reinforcing the strength of the non-oil sector. Supplier performance remained strong, with delivery times improving for the second month in a row, particularly in the manufacturing sector.' Raise capacity, add space Saudi non-oil businesses 'continued to fill up warehouses, albeit with rates of purchasing growth and stock accumulation tempering since the start of the year', according to the PMI report. 'Whilst robust staffing levels, efficient supply chains and healthy stockpiles enabled many firms to lower backlogs, this was often countered by demand pressures and administrative delays. Subsequently, the overall level of incomplete business fell only fractionally.' Sign up for the Daily Briefing Get the latest news and updates straight to your inbox
