According to the results of a poll, businesses looked to enlarge their workforce in order to meet the challenges posed by rising levels of both sales and consumer demand.
Even though business conditions in Saudi Arabia’s non-oil economy improved at a somewhat slower rate at the end of last year following a boom, the country witnessed the largest rise in employment in almost five years. Saudi Arabia saw the biggest gain in employment in almost five years.
According to the findings of a study of buying managers conducted by S&P Global and released on Tuesday, businesses looked to boost their staffing capacities in response to an increase in sales and increasing demand for their products.
The Riyadh Bank Saudi PMI reached a reading of 56.9 in December, which is much higher than the threshold of 50 that separates expansion from contraction. In November, the gauge registered a reading of 58.5, marking the highest level in more than seven years.
“We see operating conditions remaining favourable in December, characterized by rapid growth in non-oil activities and a robust labour market by the end of 2022,” said Naif Al-Ghaith, chief economist at Riyad Bank. “Both jobs and wages have far more momentum than previously thought,” Al-Ghaith added. “We see operating conditions remaining favourable in December.”
The strength of the economic momentum after the pandemic, which has been largely immune to a sharp increase in the cost of money at home and the threat of a slowdown globally, is reflected in the buoyancy of the non-oil private sector, which is the engine of job creation for the world’s top crude exporter. This has allowed the economy to recover from the pandemic relatively unscathed.
Companies felt the need to pass on greater costs to their customers in December, which resulted in price increases that were the most they’d been in nine months and the fastest rate since the beginning of the year.
According to Al-Ghaith, “the quick growth has been more than enough to counterbalance the increase in interest rates.” Prices in the service industry have increased even more as a result of this large expansion, which points to an inflationary pressure created by the demand side.