Saudi Arabia sees fastest job growth in 14 years as wage costs surge, PMI shows

11 hours ago 43

Saudi Arabia records its fastest private sector job growth since 2011, driven by tourism and aviation, despite rising wage and input costs/Representative Image

Saudi Arabia’s private sector is experiencing its fastest pace of job creation since May 2011, according to the latest Purchasing Managers’ Index (PMI) from Riyad Bank. The robust hiring is fueled by rising demand and economic optimism, but it also comes with rising wage and input costs, placing pressure on overall pricing.

Job Market Heats Up, But So Do Costs

According to the June PMI report:

New jobs across non-oil sectors increased at the sharpest rate in 14 years
This hiring boom led to a record rise in wage costs, contributing significantly to overall cost pressures

“This surge in demand for staff contributed to a record increase in wage costs… and led to a renewed rise in output prices,” the report noted. Adding to wage inflation, input purchase costs also rose at the fastest rate since February 2025, driven by geopolitical risks and stronger demand.

Travel and Aviation Driving the Job Boom

A major contributor to this hiring wave is Saudi Arabia’s travel and tourism sector, particularly with the highly anticipated launch of Riyadh Air.

Aviation-facing businesses are actively expanding their teams
Hiring consultants note increased recruitment across airlines, airports, and hospitality services

This activity reflects the Kingdom’s broader vision to diversify away from oil and develop a thriving tourism and service economy.

June PMI Surges to 57.2: A Sign of Expanding Growth

Saudi Arabia’s non-oil PMI rose to 57.2 in June, up from 55.8 in May. A reading above 50 indicates business expansion. Key drivers of the PMI rise include:

Higher output levels
Rising demand and new project launches
An active labour market

“Firms largely linked the pickup in activity to improving sales, new project starts, and better demand conditions,” the report stated.

Though output growth was slightly softer than earlier highs, the momentum in hiring and project activity remains strong.

Business Confidence Hits Two-Year High

Despite rising costs, sentiment in the Saudi private sector remains upbeat.“Confidence about future activity climbed to a two-year peak,” said Naif Al-Ghaith, Chief Economist at Riyad Bank in a public statement. “Staff costs rose at a record pace as firms worked to retain talent… while purchase prices saw their fastest increase since February.” The positive outlook is underpinned by: