Saudi non-oil private sector slowed down in December… Job ‎creation rate was fastest in 5 years‎

A survey showed on Tuesday that the growth of the non-oil private sector in Saudi Arabia slowed to the lowest level in three months in December, although the increase in sales and the strength of demand indicates that companies remain optimistic about the outlook for next year.

According to “Reuters”, the Riyad Bank Purchasing Managers’ Index, adjusted in light of seasonal factors, declined to 56.9 in December from 58.5 in November, marking the lowest reading since September, but it is still much higher than the 50-point level that separates growth from contraction. ..

The rate of job creation was the fastest in nearly five years, with the employment sub-index rising to 52 in December from 50.6 in November.

However, the output sub-index fell to 61.0 in December from 64.6 in November, and the pace of growth in new orders also slowed.

Estimates of the Saudi government indicate that the gross domestic product will grow by about nine percent in 2022, after an upward adjustment from its previous estimates, as the Ministry of Finance attributed the amendment to a large extent to the activity of the non-oil private sector.

Nayef Al-Ghaith, chief economist at Riyad Bank, said, “We note that operating conditions remained favorable in December, and were characterized by rapid growth in non-oil activities and a strong labor market by the end of 2022, with a much greater momentum for jobs and wages than previously thought.”

Overall, the December data point to continued growth for the fourth quarter with optimism about the year ahead. This made us strongly expect non-oil GDP growth of more than four percent in 2023.

Although business sentiment for the year ahead remained generally positive supported by expectations of higher investment and stronger demand, the confidence fell to a seven-month low in December.