Business Activity in Saudi Arabia Hits 3-Month High
Saudi business activity within the private non-oil economic sector hit a three-month high in November, as a result of rapid growth in employment, output and new orders, based on data from a recent published survey.
Measuring activity within the services and manufacturing sectors, the SABB HSBC PMI climbed from 56.7 points in October to reach 58.1 last month. These results are the highest recorded since August.
This Saudi Arabian index is seasonally adjusted. Recent results are well above the 50 –point result that marks the shift from contraction to growth.
The PMI surveys over 400 private firms and reported growth within new orders. That figure reached 67.7 points last month, the highest result since July and a significant increase from the October figure of 64.7. Employment within the Saudi non-oil private sector increased during the month of November as well, reaching a three-month high of 51.7, up from October’s figure of 50.1.
Weakened economies in the U.S. and Europe have affected Saudi Arabia, however the stable global oil prices and announcements of infrastructure and job creation projects worth multi-billion dollars have supported growth in the Kingdom.
Many firms surveyed stated that the strong performance put forth by Saudi’s construction sector has delivered benefits to their business. New export work experienced slower growth, as some businesses reported that Middle Eastern and North African political tensions, as well as Europe’s economic issues, have undermined overall demand.
Saudi Arabia and the UAE Experience the Region’s Largest Annual Job Growth Rates
The maximum amount of jobs generated within the region next year will be found in Saudi Arabia, based on statements made by regional recruitment experts.
Job creation will be led by the Kingdom, which has experienced GDP growth of 5 percent on a year-on-year basis for the last 32 years, despite many highs and lows. Saudi Arabia has ever been perceived as the Middle East’s growth engine, according to Shane Phillips of Stanton Chase.
Phillips, the Practice Leader for Financial and Professional Services in the MENA Region at Stanton Chase, also stated that Bahrain would likely continue to experience struggles. That nation does not have the fundamentals or size of Saudi to drive it beyond the crisis. MNC’s have moved out of Bahrain and little new FDI is expected for Bahrain, according to Phillips.
The UAE and Qatar will join Saudi Arabia in driving the job market, reported Huxley Associates’ Middle East Business Manager Hasnain Qazi. Qazi noted that recent employment trends indicate Saudi Arabia leads the pack in job creation, followed by Qatar. The UAE joins those two to make a group of three nations with the highest rate of growth forecasted. These expectations will have a positive influence on the job markets.
Stanton Chase Partner and Marketing and Operations Director Konstantina Sakellariou stated that consideration should be given to the rising emphasis on programmes of nationalization. These programmes prioritize nationals for placement in various positions, particularly in government and government-related sectors, which are incidentally leading the growth at the moment.
Current trends indicate that Saudi Arabia and the UAE have experienced the largest annual job growth rate. Monster.com’s October index is the most recent and shows that over the course of twelve months from October of 2010 to October of this year, online opportunities have grown within six of the seven nations. Saudi Arabia took the lead with a 49 percent growth rate, while the UAE had 7 percent growth and pulled ahead for monthly growth across all sectors.
Bahrain reported results unchanged from September’s with an 11 percent drop. The sharpest annual decline within the nations was reported by Bahrain. Qatar’s rate rose by 22 percent and recorded monthly recruitment activities consistent with the figures reported in September. Kuwait recorded month-on-month growth on the positive side, the first time that has occurred since June of 2011. Kuwait’s month-on-month growth was 3 percent higher from September to October.
Oman Investments in Free Zones Set To Create 20,000 Jobs
Higher private investments in the manufacturing, services and commerce sectors of Oman will be the result of extensive promotion of economic free zones in the Sultanate, according to the Minister of Commerce and Industry Sheikh Sa’ad Bin Mohammed Al Mardhouf Al Sa’adi.
Speaking at a recent forum in the Al Bustan Palace Hotel, the minister noted that the free zones are expected to bring in about $6bn in both domestic and foreign investments, as well as generating over 20,000 jobs. Indirect jobs alone should total 2,020.
Around 87 million square metres of land have been allocated between existing and yet to be constructed industrial estates. The total amount of investments in these estates sits at $9.4bn.
Investments of over 70 million rials from the PEIE (or Public Establishment for Industrial Estates) will cover both expansions to the existing areas and new zone construction. This figures includes investments in the Sumail Industrial Zone totaling 30 million rials.
Massive investments have flowed into the Sohar port industrial zone and the Salalah Free Zone is forecasted to draw about $3.5 billion in investments. Special Economic Zone Authority in A’Duqm, Yahya Bin Said Al Jabri, stated that these projects would create significant employment opportunities and boost the Omani economy.
He also noted that non-oil contributions would rise to 5 percent, while the re-export figures should increase along with the socioeconomic growth rate of Oman.
Inter-Arab trade in the Sultanate totaled $70 billion in 2009, which accounted for 9.5 percent of the foreign and Arab trade. AUFZ (or Arab Union of Free Zones) chairman Eyad Al Qudhah noted that this low rate indicates that further enhancements in Arab cooperation are needed, as well as the availing of beneficial opportunities within the region.Paul Holdsworth, Staff Writer, Gulf Jobs Market News