Last October, companies operating in the non-oil sectors in the Kingdom of Saudi Arabia recorded the highest employment growth rate since October 2014, according to the Riyad Bank Purchasing Managers’ Index, supported by “strong growth in new business” and “ Noticeable expansion in activity.
The bank stated in its monthly statement that the main purchasing managers index rose in October for the second month in a row, recording 58.4 points compared to 57.2 points in September. This is the highest reading in the index since June, and it indicates “a significant improvement in the conditions of the non-oil-producing private sector in the Kingdom.”
Any reading above 50 points for the index indicates a general improvement in business conditions.
The bank said in a statement that strong labor market conditions helped lead to a faster increase in wages, which increased input cost pressures while also accelerating purchase price inflation. However, companies cut selling prices for the second month in a row amid further reports that strong competition has eroded market share.
The statement explained that commercial activity continued to grow at a noticeable rate at the beginning of the fourth quarter of this year, in response to increasing customer demands and improving economic conditions, adding that the non-oil economy companies included in the bank’s study reported a sharp increase in new incoming business, with an improvement in the expansion rate. To its highest level in 4 months. Growth in production and new business has remained broad across the manufacturing, construction, wholesale, retail and service sectors.
According to the statement, the latest data from the study conducted by Riyad Bank specifically indicated a sharp increase in employment activity in the non-oil-producing private sector. The companies included in the study reported that strong demand and strong production expectations led to the need to increase employee numbers. As a result, total employee numbers rose to the highest degree since October 2014.
The statement also indicated that non-oil producing companies reported a faster expansion in purchasing activity during October, which represents the first recovery in the growth rate in 4 months. He said that the significant increase in the purchase of production supplies is mainly due to increased demand from customers.
Commenting on these results, the senior economist at Riyad Bank, Nayef Al-Ghaith, said that in October the index rose to 58.4 points, indicating strong growth in the non-oil producing sector. He added, “This positive development was primarily driven by the significant increase in employment levels, which reflects the increase in recruitment activity and the size of the workforce.” He pointed out that the expansion in employment “is a promising sign for the Saudi economy, because it indicates an increase in demand for labor and a potential improvement in the labor market.”
2023-11-05 16:19:55
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