The non-oil private sector in Saudi Arabia achieved remarkable growth last September, the highest level in 7 years, and new orders rose at the highest rate in seven years, after the easing of restrictions imposed due to the Covid-19 pandemic on activities and travel supported consumer demand.
This came in a report published by “Reuters”, in which it indicated that yesterday’s survey showed that the IHS Markit Purchasing Managers’ Index in Saudi Arabia, adjusted in light of seasonal factors, rose to 58.6 in September from 54.1 in August, to remain above the 50-separate level. between growth and contraction, noting that the 4.5 point increase represents the strongest improvement in the non-oil sector conditions since August 2015. The report also indicated that companies increased their production at the highest rate since May and new orders jumped, so its sub-index increased ten points on a monthly basis.
“After two consecutive months of decline, the latest reading shows that the economic recovery is strong, and the easing of pandemic restrictions will trigger a new wave of demand,” said David Owen, economist at IHS Markit.
Saudi Arabia, the world’s largest oil exporter, expects to achieve economic growth of 2.6% this year and 7.5% in 2022, after a 4.1% contraction last year due to the Corona crisis and a record drop in oil prices.
Private sector growth is a key aspect of the Kingdom’s Vision 2030, a plan aimed at transforming the economy and making it less dependent on oil.
However, the report noted that despite the increase in new orders, the availability of job opportunities remained limited in September. The companies surveyed reported adequate absorption levels.
“Demand pressures and growing optimism about activity will prompt more companies to hire staff during the last quarter of this year,” said David Owen.
Abstracts from the report
* The positive figures achieved in the growth of the non-oil sector in the Kingdom to its highest level in 7 years, come as a translation of the strategy to reduce dependence on oil announced by His Highness the Crown Prince in 2016, which confirms that these trends were built according to an ambitious action plan aimed at economic diversification. By investing opportunities in promising sectors such as tourism, sports, entertainment, mining and logistics.
* The success of the Saudi economy in overcoming many obstacles and challenges that the world faced during this year and the one before it; It affirms the robustness of the economic and structural reforms undertaken by the Kingdom’s government in light of Vision 2030 and its prominent role in achieving sustainable and comprehensive economic growth.
* The growth of the non-oil sector in the Kingdom to its highest level in 7 years, further evidence of the success of the government’s plans and policies towards achieving the desired economic transformation in accordance with the objectives of the Kingdom’s Vision 2030 aimed at diversifying the national economy, and increasing the contribution of the private sector to investment in promising sectors, which is reflected in the Increasing employment opportunities, and continuing to raise the standard of living of citizens.
* Initiatives to stimulate the economy and support the private sector played a prominent role in the rapid response of the economy after the Corona waves. In the first half of 2021 AD, the non-oil GDP recorded a growth of 5.4%, supported by the real GDP growth of the private sector, which recorded a growth of 7.5%. Expectations also indicate that real GDP will grow by 2.6% in 2021, driven by a 4.2% growth in non-oil GDP.
* The recent results of the IHS Market Purchasing Managers Index in Saudi Arabia, expectations of achieving economic growth by 2.6% this year and 7.5% in 2022, after a 4.1% contraction last year due to the Corona crisis and a record drop in oil prices, prove the soundness of policies, structural reforms and sound government directives to accelerate Growth of business opportunities within the Kingdom, supporting the achievement of Vision 2030, and achieving sustainable, flexible and diversified growth for the Kingdom’s economy.
The investments that the Public Investment Fund injected into the arteries of the Saudi economy during the last period, and the Kingdom’s launch of a partner program to enhance partnership with the private sector, had a significant impact on the growth results achieved by the non-oil economy, which reinforces the continued progress in implementing programs and projects to achieve the vision, and develop promising sectors of the economy.
* It is expected that the private sector will continue to grow at a higher rate than before to lead economic growth and create jobs for male and female citizens, as the government continues to implement the Kingdom’s economic transformation plans and enhance the role of the private sector by increasing the participation of funds in capital spending, such as the Public Investment Fund, which is the effective engine for the development and diversification of the economy.