ECONOMY

Robust jobs market reflects Saudi economy’s strength

Saudi Arabia's real GDP grew by 1.3% in 2024 compared to the previous year, according to latest estimates by the General Authority for Statistics (GASTAT). The expansion was driven by a 4.3% increase in non-oil activities and a 2.6% rise in government activities.

Most economic sectors were in positive territory in 2024. Wholesale and retail trade, restaurant, and hotel activities achieved the highest annual growth rate at 6.4%, followed by financial services, insurance, and business services activities at 5.7%. Electricity, gas, and water activities climbed 4.9%. Additionally, other mining and quarrying activities and transport, storage, and communication activities jumped 4.5%.

“On a quarterly perspective, real GDP increased by 4.5% year-on-year (YoY) in Q4/2024,” GATSTAT noted. “On a seasonally adjusted basis, GDP grew by 0.5% quarter-on-quarter (QoQ) compared to Q3/2024. Non-oil activities increased by 4.7% YoY and 1.6% QoQ. Oil exports recorded a 3.4% YoY growth but declined by 1.5% QoQ. Meanwhile, government activities grew by 2.2% YoY and 0.6% QoQ.”

Despite tensions surrounding global trade, Saudi Arabia’s non-oil exports registered an impressive 17.3% growth in the fourth quarter.

Non-oil exports, including re-exports, rose 17.3% compared to Q4 2023, while national non-oil exports, excluding re-exports, increased by 8.2%. Moreover, the value of re-exported goods increased by 47.3% during the same period, latest GASTAT data shows.

On the other hand, imports rose 15.5% in Q4 2024, and the merchandise trade balance surplus decreased by 52.4% compared to Q4 2023.

MORE SAUDI WOMEN ENTER LABOUR MARKET

Young Saudi women (15-24 years) saw a 0.3 percentage point (pp) increase in employment-to-population ratio, reaching 13.9% in the fourth quarter of 2024. Overall, the employment-to-population ratio of Saudi females of all ages increased by 0.5 pp, reaching 31.8%. Unemployment rate among Saudi females of all ages also fell 1.7 pp to 11.9%, compared to the previous quarter of 2024.

Overall, the unemployment rate among Saudi nationals dropped to 7%, representing a significant quarterly decline of 0.8 pp and matching the same level of improvement on an annual basis. At the same time, the employment-to-population ratio for Saudis edged up to 47.5%, increasing by 0.1 pp from the third quarter and by 1 pp versus Q3 2023 – an encouraging sign of greater workforce engagement.

The kingdom’s overall labour market also showed signs of improvement in the final quarter of 2024, according GASTAT’s latest Labour Force Survey. The overall unemployment rate, which includes both Saudis and non-Saudis, stood at 3.5%, reflecting a drop of 0.2 pp from the previous quarter. However, when compared to the same period in 2023, this marked a slight uptick of 0.1 pp.

The overall labour force participation rate declined slightly to 66.4% in Q4 2024, down 0.2 pp from the third quarter and 0.6 pp lower than the same period a year earlier.

STRONG BUSINESS SENTIMENT

Saudi Arabia’s non-oil private sector continued to show strong momentum in March, with businesses expanding their workforce at a notable pace, according to the latest Purchasing Managers’ Index (PMI) data.

This surge in hiring was supported by a solid uptick in demand, which in turn drove output higher and led many companies to build up their inventories in anticipation of continued growth.

Despite these positive signals, intense competition across the non-oil economy prompted many firms to reduce their selling prices, marking the first decline in March – the first in six months. At the same time, input cost pressures eased considerably, with the rate of cost inflation falling to its lowest level in more than four years.

Survey respondents pointed to a healthy demand environment as the first quarter ended. New orders increased at a strong pace, though the rate of growth moderated from January’s near 14-year high.

The rise in new business translated into another strong month for job creation. Employment levels grew sharply, with staffing increases largely consistent with February’s 16-month high. Many companies reported actively expanding their sales teams and operational capacity to meet rising demand. In fact, data for the first quarter suggest that the pace of job creation is the fastest the non-oil sector has seen since the third quarter of 2012.

The increase in workforce numbers, along with a continued flow of new business, helped sustain strong activity levels across the non-oil economy. However, the pace of output growth eased to its slowest since October 2024. Nonetheless, businesses remained optimistic, ramping up purchasing and stockpiling efforts to prepare for further demand.