More women are entering the Saudi labour market, helping to reduce overall unemployment figures in the Gulf kingdom, according to latest official figures.
The General Authority for Statistics’ (GaStat) latest market release showed that unemployment declined to 12.6 percent in the fourth quarter of 2020, down from 14.9 percent in the previous quarter.
Analysing the data, Saudi-based Jadwa Investment said the improvement was mostly affected by a drop in female unemployment, which declined to 24.4 percent from 30.2 percent in Q3.
Analysts said labour force participation rose in Q4 to 51.2 percent, up from 49 percent in Q3, with higher participation by both genders.
At the same time, the number of expatriates in the labour market declined by 121,000 quarter-on-quarter in Q4 while the number of Saudis also declined by around 1,000 workers over the same period.
On a sectorial basis, public administration and accommodation and food service’ saw the largest rises in employment for both Saudi and expat workers in Q4.
For expats, construction continued to see the largest number of departures, followed by administrative and support services, Jadwa added.
It said the recovery in the labour market has “proceeded quicker than we anticipated” with Saudi unemployment at 12.6 percent at the end of 2020 versus its forecast of 14 percent.
“At the same time, however, the swift recovery reinforces our view that Saudi unemployment will decline to 12.1 percent by the end of 2021. More specifically, with the ongoing roll-out of vaccines in the kingdom, business sentiment is expected to improve significantly during H2 2020, which, along with ongoing localisation efforts, will help create more employment opportunities for citizens,” Jadwa noted.
Job creation is the biggest domestic challenge facing Saudi Crown Prince Mohammed bin Salman as he reshapes an economy long dependent on exported oil and imported labour.
Unemployment hit a record 15 percent last year, when Covid-19 set back the ambitious Vision 2030 plan to transform the kingdom into a regional business and tourism hub.
High unemployment risks impoverishing a middle class previously cushioned by state spending. Without fundamental change, the problem is set to worsen as a demographic bulge of youth pours onto the labour market, raising the prospect of social instability as frustrations grow.
Yet while the pandemic’s magnified the challenge, it’s also galvanised officials and accelerated a shift in mindset among younger Saudis, who are increasingly taking blue-collar jobs they once shunned.
Saudi workers are now visible everywhere, delivering packages, serving espresso and moving oil rigs. Multiple firms with foreign employees trapped abroad by Covid-related border closures have previously said they have accelerated plans to hire locals.
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