Saudi job growth remained strong in February, despite a slight slowdown in non-oil sector momentum. Companies continued to hire aggressively and raise wages.
The Riyad Bank Saudi Arabia Purchasing Managers’ Index slipped to 56.1 in February from 56.3 in January. This marks the slowest improvement in operating conditions for nine months. However, the reading stays above the neutral 50 mark, indicating ongoing expansion in the non-oil economy.
Output growth eased to a six-month low, but firms still reported solid gains in activity. Many businesses cited stronger customer demand, new project approvals, and improved domestic sales. Additionally, stepped-up marketing efforts helped support growth, while competitive pressures slightly slowed expansion.
New orders continued to drive activity, supported by government initiatives and digital development projects. Meanwhile, international sales expanded for the seventh consecutive month, though at a slightly slower pace than before.
Naif Al-Ghaith, Chief Economist at Riyad Bank, noted that Saudi job growth reflects robust domestic demand. He added that companies expanded their workforces to manage higher workloads and new business inflows. Overall, the non-oil private sector remains in growth territory despite softer momentum.
Employment rose sharply, with the job creation rate reaching a four-month high. Firms increased payrolls to meet rising sales volumes and a backlog of orders. This hiring surge also led to the fastest wage growth recorded since the survey began in 2009.
Rising staff costs contributed to higher selling prices, which increased at one of the fastest rates since May 2023. Companies also faced higher supplier charges and metals prices. A drop in fuel expenses helped moderate purchase-price inflation, while renegotiated vendor contracts benefited some firms.
Supply chains showed improvement as delivery times shortened to the greatest extent in nine months. Businesses expanded purchasing volumes while maintaining balanced inventory levels. Operational efficiencies and improved vendor coordination helped support this progress.
Looking ahead, firms remain confident about the next 12 months. Companies expect output growth from new client projects, steady demand, and favorable domestic economic conditions. Analysts view the data as a sign of a non-oil economy moving toward a sustainable pace after last year’s rapid expansion.
In summary, Saudi job growth continues alongside robust hiring and wage increases. While PMI shows slightly slower output growth, the private sector remains in strong expansion mode. Businesses are adjusting staffing and inventory strategies while maintaining confidence in future demand.
