Unemployment levels rise in Saudi as expat employment falls

Almost 30,000 new jobs have been created for nationals during the second quarter, many of them women

Unemployment levels have increased slightly in Saudi Arabia, according to new labour market data, however there has been an uplift in new jobs for nationals.

Jawda Investment’s Q2 Labour Market Update revealed that the overall unemployment rate rose from 12.7 per cent to 12.8 per cent between the first and second quarters of 2017. But net new jobs for Saudis rose by 28,900 during the same period, with around 40 per cent of those jobs taken up by women.

Total new jobs for non-Saudis declined by 161,500, predominantly due to a fall in jobs for non-Saudi women.

A third of women were unemployed during the second quarter, compared with 7.4 per cent of men. However, the lifting of the ban on women driving from June next 2018 is likely to “not only raise female participation and employment rates, but also create a number of new jobs”, the report noted.

Youth unemployment levels (20 to 29 year olds) dipped slightly, from 23.3 per cent in the first quarter to 22.7 per cent during the second quarter.

Saudi Arabia has been working hard to increase employment levels among nationals, particularly Saudi women, who have been given greater freedoms around employment.

In September, a royal decree was issued which will give women the ability to apply for a driving licence, while other changes have been made to enable women to work in previously forbidden roles, such as air traffic control. Last month, it was announced that only Saudi women would be able to run female clothing stores in the Kingdom.

The Saudisation ratio in the local economy increased from 42.5 per cent to 43.1 per cent, however the report put this mainly down to more non-Saudis leaving the local labour market, rather than higher employment levels among nationals.

Jawda also predicted the country would continue to see declines in the net employment of Saudis in the second half of the year, and into 2018, “due to a combination of both a gradual increase in the expat dependent fees and the implementation of the expat levy”.

“Looking ahead, we expect to see continued structural changes in the employment patterns of non-Saudi in the next few years, especially since, firstly, the expat dependent fees are expected to rise gradually until 2020, and, secondly, an expat levy is expected to commence in 2018, which will also rise incrementally to 2020,” said the report.

The Ministry of Labor and Social Development announced last month that Saudi Arabia would be reducing the length of its employment visas for overseas workers in private sector organisations, from two years to one year.

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