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Tue 31 Jan 2017 02:25 PM

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GCC jobs market set to stabilise in 2017 after 'massive redundancies'

GulfTalent survey of 800 employers shows the number of firms planning to cut headcount is set to nearly half compared to 2016

GCC jobs market set to stabilise in 2017 after 'massive redundancies'

The jobs market in the Gulf is forecast to stabilise in 2017 following a year of "massive redundancies" caused by the collapse in oil prices, according to recruitment firm GulfTalent.

A moderate rate of new job creation is likely to be seen this year, said a survey of more than 800 employers across the GCC. 

The poll showed that the number of companies cutting headcount is set to drop drastically, from 40 percent of survey respondents in 2016 to 23 percent this year.

At the same time, more firms plan to expand their workforce, increasing from 41 percent in the past year to 47 percent in 2017.

GulfTalent said Saudi Arabia is a notable exception to the overall positive trend, due to its higher dependence on oil revenues.

Data from the survey indicated that the Gulf kingdom continues to be hard hit, with 45 percent of participating firms expecting headcount reductions in 2017 compared to just 15 percent of firms in the UAE. 

This is consistent with the IMF’s findings, which recently revised down its GDP growth outlook for Saudi Arabia from 2 percent to 0.4 percent, it added.

GulfTalent said its survey found significant variations in the fortunes of different sectors across the region.

Manufacturers reported the most positive outlook, with 58 percent of firms in the sector planning to grow staff numbers in 2017.

Healthcare companies, including hospitals, reported the second highest rate of jobs growth, with 55 percent of firms planning headcount expansion on the back of increasing demand from a fast growing population. 

The survey said banks are expecting a relatively positive year, with 44 percent planning some increase in headcount and only 8 percent of surveyed banks planning to cut staff this year, in sharp contrast to 38 percent who reported cuts in 2016.

The oil and gas sector, which has been battered by two years of low oil prices, continues to downsize. However, the pace has moderated, with only a third of firms planning job cuts in 2017, compared with almost half in 2016.

Construction remains among the region’s worst performing sectors, according to GulfTalent’s survey with 45 percent of firms reporting plans to cut staff numbers this year, only marginally better than the 55 percent level who reported having cut jobs in 2016.

The sector has been hit hard by cuts in government budgets and cancelled or delayed projects. It has also suffered billions of dollars in delayed payments, in some cases resulting in wages for thousands of workers going unpaid for several months.