Hiring in UAE and Saudi Arabia rises sharply on non-oil economic boost

The National

05-05-2025

The pace of hiring in the UAE and Saudi Arabia rose sharply in April after business activity in their non-oil private sector economies maintained strong growth amid the continued push for diversification. The headline S&P Global UAE purchasing managers' index remained unchanged at 54 in April, remaining well above the 50-point mark that separates economic expansion from contraction. Staff numbers across the Arab world's second-largest economy rose at the sharpest rate in 11 months, after a relatively subdued period of job creation since the final quarter of last year. Businesses surveyed attributed higher employment to a 'growing need to address workloads', which the data indicated rose to levels seen in early 2024. 'After several months of mild increases in payroll numbers, despite robust sales growth, job creation rose to its highest level in 11 months as firms signalled this was mainly done as part of efforts to reduce their backlogs, which rose sharply but at the softest pace in six months,' David Owen, senior economist at S&P Global Market Intelligence, said. Employment growth was still modest overall, however, adding to suggestions that 'some firms may be struggling to recruit' amid talent shortages. 'The headline PMI's reading of 54 … unchanged from March, signals that underlying business conditions are still improving robustly,' Mr Owen said. In Saudi Arabia, the headline Riyad Bank purchasing managers' index slipped last month to 55.6, but remained well within the expansion territory. Employment numbers in the kingdom which have been rising since February, increased in April at the joint-fastest level since October 2014. 'Employment in the non-oil private sector has been particularly vibrant,' said Naif Al Ghaith, chief economist at Riyad Bank. The fastest pace of hiring in more than 10 years in April 'is a response to rising sales and increased business activity, prompting firms to expand staffing capacities' he said. Economies in the Gulf region, which accounts for about a third of the world's proven oil reserves, have maintained a robust pace of the expansion despite global economic headwinds and the geopolitical uncertainty over the past few years. The UAE economy, which grew by 3.9 per cent in 2024, driven by the country's non-oil sectors, is expected to expand by 4.7 per cent in 2025 and by 5.7 per cent in 2026, the UAE Central Bank said in its 2024 annual report, released last month. The non-oil economy of the Emirates grew by 4.6 per cent last year and is expected to hit 5.1 per cent expansion this year, UAE Central Bank data indicated. Meanwhile, Saudi Arabia's gross domestic product grew by 2.7 per cent in the first quarter of 2025, driven by a 4.2 per cent jump in non-oil activities in the kingdom, which is diversifying its economy away from hydrocarbons. Government activities grew by 3.2 per cent in the first three months of this year, while oil activities recorded a 1.4 per cent year-on-year decline, according to latest data from the kingdom's General Authority for Statistics. S&P said business activity at non-oil companies in the kingdom increased sharply at the start of the second quarter, with firms surveyed attributing higher volume of sales driving output. New project approvals, as well as strong tourist numbers, also drove non-oil economic activity. 'Although the rate of output growth was marked, it was the slowest in seven months, partly attributed to a softer increase in sales volumes,' according to the PMI survey. 'In some instances, firms noted that global economic uncertainty had impacted client spending, while others cited rising competitive pressures.'