Saudi Economy

Several economic indicators in Saudi Arabia point to continued non-oil activity over the summer. Exports saw a robust 12.4% year-on-year surge in non-oil exports for April 2024, according to the General Authority for Statistics (GASTAT).

National non-oil exports, excluding re-exports, climbed by 1.6%, while the value of re-exported goods skyrocketed by an impressive 56.4% compared to April 2023. These figures underscore Saudi Arabia’s expanding influence as a key player in global trade and an international hub for goods transit.

Notably, plastics, rubber, and their products emerged as a standout category, constituting 26.2% of total non-oil exports and registering a significant 20.5% increase from the previous year. This growth reflects the resilience and diversification of the Saudi economy, showcasing its capacity to nurture a variety of promising sectors.

Additionally, the report highlights an uptick in the ratio of non-oil exports (including re-exports) to imports, reaching 37.1% in April 2024, up from 32.6% in April 2023. This shift is attributed to the 12.4% increase in non-oil exports coupled with a 1.3% decline in imports over the same period. Also, the value of merchandise imports fell by 17.4%, contributing to a 36.0% improvement in the trade balance compared to March 2024.

EMPLOYMENT STATISTICS

Labour data also reflects the job market’s strength. The overall unemployment rate, encompassing both Saudis and non-Saudis, held relatively steady at 3.5%, a slight uptick from 3.4% in Q4 2023. Encouragingly, the unemployment rate for Saudis saw a marginal decline to 7.6% from 7.8% in the preceding quarter, latest GASTAT data shows.

Diving deeper, the data presents a mixed picture for gender-specific employment trends among Saudis. The unemployment rate for Saudi females nudged upward to 14.2% from 13.9% in the last quarter, reflecting ongoing challenges in the female labour market. Conversely, Saudi males experienced a positive shift, with their unemployment rate falling to 4.2% from 4.6%.

Labour force participation among Saudis saw a commendable rise, reaching 51.4% compared to 50.4% in the previous quarter. However, the overall participation rate, which includes both Saudi and non-Saudi workers, dipped slightly to 66.0% from 67.0% in Q4 2023.

The labour force participation rate for Saudi females increased to 35.8% from 35.0%, signalling a positive trend in female workforce engagement. Similarly, Saudi males saw their participation rate climb to 66.4% from 65.4% in the previous quarter, highlighting a broad-based improvement in male employment metrics.

These latest figures offer a detailed glimpse into the dynamics of Saudi Arabia's labour market, mirroring ongoing efforts to boost employment and participation rates amid the kingdom's broader economic transformation.

COMMERCIAL REGISTRATIONS

Meanwhile, the total number of issued commercial registrations in the second quarter of this year increased by 78% compared to the same quarter of last year, according to the Ministry of Commerce. During the past three months, 121,000 commercial registrations were issued, bringing the total number of commercial registrations to more than 1,518,000 in all regions of the country.

The youth category, both male and female, accounted for 38% of the total existing commercial registrations for establishments in the kingdom. E-commerce commercial registrations, which represent an important pillar of the national economy, grew by 17%, exceeding 40,000 registrations by the end of the second quarter of 2024.

The figures not only illuminate the dynamic growth of Saudi Arabia’s non-oil sectors but also highlight the kingdom’s evolving role in the global trade arena, reflecting its economic strategy aligned with Vision 2030’s ambitious goals.

UPBEAT PURCHASING MANAGERS

June saw a robust improvement in business activity in Saudi within the non-oil private sector, as companies increased output levels to support sales and projects, according to S&P Global’s monthly Purchasing Managers’ Index (PMI). The surge in activity occurred despite signs of weakening demand, with new order growth slowing to its lowest level in nearly two and a half years.

In response to growing output requirements, non-oil firms reported a continued increase in staffing numbers. However, due to tighter controls on operational costs stemming from wage pressures, the rise in staffing was modest and less pronounced than in May.

Output expectations for the year ahead improved in June but remained low compared to historical standards, with improving market conditions cited as a reason for optimism. Non-oil businesses reported the slowest rise in input purchases in nearly three years, aiming to temper recent stockpile surges, while job creation growth also softened from May.