TAKAMOL HOLDINGAnalysis of GASTAT Labour Force Survey Q2 of 2019

October 2019

F e b r u a r y ٢٠١٧

INSIGHT PAPERAnalysis of GASTAT Labour Force Survey Q2 of 2019

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October 2019

This paper was produced by the Takamol Advisory Unit:

Aisha Izzet, Directoremail - a.izzet@takamol.com.sa

Gerry Croall, Senior Advisor, Policy & Impact email – g.croall@takamol.com.sa

Ruba AlYousefi, Policy & Impact Manager email – r.alyousfi@takamol.com.sa

Yara Dizar, Policy & Impact Manager email – y.dizar@takamol.com.sa

Ed Henty, Senior Specialist, Policy & Impact email – e.henty@takamol.com.sa

Ghadah Alrasheed, Policy & Impact Analyst email – g.alrasheed@takamol.com.sa

Razan AlHarthi, Policy & Impact Analyst email – r.alharthi@takamol.com.sa

October 2019

Fiscal and Economic Factors

• Jadwa estimate that Saudi Arabia is expected to see a limited growth in GDP in 2019 of only 0.5% reflecting OPEC oil production cuts - according to ICAEW/Oxford Economic’s Economic Update Middle East 2019 report.

• However, the IMF projects that Saudi Arabia’s GDP growth will reach 1.9% in 2019 and 3% in 2020.

• Government revenue in Saudi Arabia totalled SAR 261 bn in Q2 of 2019, a decrease of 5% year on year. Decreases were seen in both oil and non-oil revenue.

• Tax revenue on the other hand increased by 20% on a yearly basis. An increase of expat dependency fees also means tax revenue will continue to rise throughout the rest of the year.

• Capital spending in Saudi Arabia increased by 27% in Q2 of 2019 to a total of SAR 294 bn - this is said to potentially contribute directly to increasing non-oil activity in the Kingdom.

• The fiscal deficit stands at SAR 196 bn and is expected to rise in the next two quarters.

• Global oil demand growth is expected to be modest for 2020, with total oil demand expected to be exactly the same as in 2019, at 1.14 billion barrels per day.

• OPEC expects oil demand growth from US, China and India to decline on a yearly basis from 2020 whereas the same countries in 2019 yearly demand growth is expected to make up 67% of the total. This will decline to 56% in 2020.

• Global trade related issues is the main factor affecting oil prices which will have an impact on the global economy.Brent oil prices are trading just below the $65 USD per barrel mark.

• Global manufacturing indices have seen consistent decreases since 2018 which has also added pressure to the oil market.

The Saudi national unemployment rate has reduced by 0.2% to 12.3%, and the Saudi national employment rate has increased to 87.7%, from 87.5% in Q2 of 2019, with males accounting for an increase of 0.6% (from 93.4% to 94%) while female employment levels also increased by 0.6% to reach 68.9% in Q2 of 2019. For Saudi females, the unemployment rate has reduced from 31.7% to 31.1% and for males it has reduced to 6%, from 6.6% in Q1 of 2019.

While the unemployment rate for Saudi nationals has reduced by 0.2% overall (and by 0.6% for both males and females in Q2 of 2019), there are 21,781 fewer Saudi nationals in employment with almost two thirds of the

reduction being female. Overall there are 91,791 more people employed in the Kingdom than in Q1 of 2019, but the increase has been as a result of higher numbers of non-Saudi workers entering employment; an increase of 113,572 in Q2, of which 42,352 were female and 71,220 were male. There are 57,532 more Saudi national jobseekers than there were in Q1 of 2019, an increase of over 6% on the Q1of 2019 figure.

While there are positive indicators, specifically the reduction in the overall level of unemployment, there are also indications that there remain some specific challenges within the labour market, particularly for Saudi nationals. Youth unemployment remains a challenge as the age range most affected by unemployment is the 15-29 year olds. This is the case for both males and females, with over 60.3% of all unemployed Saudi females being within this age group and over 80% of unemployed Saudi males belonging to this age group.

• The Saudi national unemployment rate has decreased by 0.2% to 12.3% since the previous quarter.

• Despite this decreasing unemployment rate, there are 21,781 less Saudi nationals in employment, compared to Q1 2019.

INSIGHT PAPER

Summary ofUnemployment Trends

1General Authority for Statistics, Labour Market Survey, Q2 2019General Authority for Statistics, Labour Market Survey, Q1 2019General Authority for Statistics, Labour Market Survey, Q4, 2018General Authority for Statistics, Labour Market Survey, Q2, 2018Vision 2030 / NTP 2.0 2020

Jadwa Investment Macroeconomic Update, July 2019Jadwa Investment Quarterly Oil Market Update, July 2019Jadwa Investment Report Inflation, May 2019.Jadwa Economic Report 2019. Jadwa Investment, Saudi Labour Market Update Q2 2019,September 2019.

Sources:

trajectory in non-Saudi youth employment in the Kingdom when considering the year-on-year data from Q2 of 2018.

• There has been a decrease in employment in Q2 of 2019 across all age categories 15 – 65+ compared with Q1 of 2019, other than the 20-24 age group. Overall there are 153,685 less recorded employed individuals across all age categories.

• The age category in which the greatest proportionate decrease has been observed since Q1 of 2019 is the 15-19 age category (6.15%), which accounts for 3,318 less jobs in Q2.

• The age category with the greatest actual decrease in jobs is the 30-34 age group with 46,716 less jobs in Q2 of 2019 than in Q1.

• There are a total of 8,178 less Saudi males employed across all age categories with the greatest proportionate decreases seen in the 15-19 age group (6.79%), 60-64 (6.20%) and 65+ (5.74%). The greatest actual decrease in jobs was seen in the 20-24 category, which saw 8,597 less Saudi males employed in Q2 of 2019than there were in Q1.

• Employment amongst Saudi male youths continued to decrease with a total of 15,322 less Saudi males aged 15-19 employed in Q2 of 2019 than there were in Q1. This equates to a reduction of 2.32% among employed Saudi male youths.

• Employment among Saudi females fell across all age categories, proportionately most significantly in the 60-64 and 65+ categories, at 5.82% and 5.34% respectively. This however only equates to 654 jobs across bothage categories combined. More concerning is a net reduction of 16,263 jobs across the other age categories combined, including 7,560 less jobs for 15-29-year olds than in the previous quarter.

We have seen progress in Q2 of 2019 in comparison with Q1 of 2018 in terms of the overall unemployment rate, but there has been an actual decrease of 21,781 in the number of Saudi nationals in employment. Females have been affected more than males in Q2 with 13,603 fewer females in employment, while male employment has reduced by 8,178. Females therefore account for almost two-thirds of the reduction (62.5%) while males account for 37.5% of the reduction in Saudi nationals in employment.

Females remain the highest proportion of unemployed Saudi nationals, and this trend has increased between Q1 and Q2 of 2019 with 63.8% of unemployed Saudi nationals being female, compared to 60.1% on Q1 of 2019. In Q2 of 2019, the male proportion of total unemployed Saudi nationals has fallen from 39.9% to 36.2%. In comparison with Q1 of 2019, female unemployment has decreased from 31.7% to 31.1% while male unemployment has dropped by 0.6%, to 6%, within the same period.

• In comparison with Q2 of 2018, there are over 35,000 less Saudi nationals in employment in Q2 of 2019, falling from 3,125,343 in Q2 of 2018 to 3,090,248 in Q2 of 2019 - a reduction of 1.2%.

• In comparison with Q2 of 2018, there are almost 10,000 less Saudi females in employment in Q2 of 2019. However, numerically, females have fared better than males across the 12-month period as there are over 25,000 less Saudi males in employment than in Q2 of 2018.

• From a percentage perspective, females have also fared better than males with a reduction of less than 1% in the number of Saudi females in employment, compared to 1.2% less Saudi males.

• Saudi female economic participation rate increased by 2.7% - from 20.5% in Q1of 2019 to 23.2% in Q2 of 2019, while the male rate also increased by 2.7% to 66%.

• Non-Saudi employment increased by 113,572, of which 42,532 were female and 71,220 were male.

• 97.5% of unemployed Saudi females have never worked and this remains consistent with Q2 of 2018 when the figure was 97%. The %age of unemployed Saudi males who have never worked is almost 10% lower, at 87.2%, although this is a 3% increase on the Q2 of 2018 figure of 84.4%.

• Of the Saudi national labour force, 74.7% are male and 25.3% are female. This compares to 76.2% and 23.8% respectively in Q1 of 2019, showing that females are an increasing proportion of the Saudi national abour force.

• There are 1,002,855 Saudi jobseekers, of which 825,136 are female and 177,719 are male. Females therefore make up over 82% of jobseekers while males make up less than 18%. There are 47,624 more Saudi female jobseekers than in Q1 of 2019 and 9,908 more males.

Trends by Gender

Age Group Trends

These trends demonstrate a fluctuating labour market in which the comparison between Q1 of 2019 and Q2 of 2019 demonstrates that reducing the overall level of Saudi unemployment does not automatically or necessarily mean that there are more Saudi nationals in employment. Q2 of 2019 shows that the opposite is the case and this trend is reflected in the 12-month period to end June 2019 where we see over 35,000 fewer Saudi nationals in employment despite the overall unemployment rate falling from 12.9% to 12.3% within the same period.

Unemployment amongst the younger age groups continues to be a challenge, with less Saudi nationals employed across the 15-29 age group in Q2 of 2019 compared to Q1. This continues a trend from Q2 of 2018 which has seen a net reduction in youth employment (age 15-29) for both Saudi males and Saudi females. The space vacated by Saudi nationals across this age group is, to an extent, being plugged by non-Saudi labour in the short-term, with a significant increase in young non-Saudi workers employed in the 15-29 category since Q1 of 2019. There is however an overall downward

3

Saudi National Unemployment Rate

Q2 of 2018

12%

12.1%

12.2%

12.3%

12.4%

12.5%

12.6%

12.7%

12.8%

12.9%

13%

Q2 of 2019

The reduction in the unemployment rate to 12.5% has occurred despite there being 21,781 less Saudi nationals in employment than there were in Q1 of 2019. Females were affected more than males accounting for almost two thirds of the total. The Saudi female employment rate increased by 0.6% (to 68.9%) and the male employment rate by the same %age, increasing the male employment rate to 94% (from 93.4%) between Q1 and Q2 of 2019. The overall employment rate for Saudi national increased from 87.5% to 87.7% within the same period.

• The total number of employed Saudi males is 2,027,964, a decrease of 8,178 on the Q1 of 2019 figure of 2,036,142, while the total number of employed non-Saudi males has increased by 71,220 to 8,529,419 since Q1 of 2019. The total number of employed males is 10,557,383, an increase of 63,042 from Q1 of 2019.

• The total number of employed Saudi females is 1,062,284, a decrease of 13,603 from Q1 of 2019 while the total number of employed expatfemales has increased by 42,352 (to 1,237,365) from Q1 of 2019. The total number of employed females is 2,299,649, an increase of 28,749 from Q1 of 2019.

• Overall there was a net reduction in the number of non-Saudi males employed across all age categories, with the greatest proportionate decrease seen in the 50-54 worker category (5.18%). This reduction amounts to 27,500 less workers. • Employment fell proportionately highest for non-Saudi females in the 15-19 age group, by 5.52%. However, increases in employment amongst 20-29-year-old and 34-39-year-old non-Saudi females meant a net increase of 3.54% overall in Q2 of 2019.

• There has been a decrease in total employment across all age categories in Q2 of 2019 compared with Q2 of 2018. Proportionately this was highest in 15-19 (18.23%), 20-24 (17.20%) and 25-29 (12.20%) age categories, with a combined reduction of 13.69% in employment for those aged 15-29.

• The decrease in youth employment was true for both Saudi males and females across all three categories (15-19, 19-24, 25-29) with 48,352 less Saudi males and 6,930 less Saudi females in employment in Q2 of 2019 than in Q2 of 2018.

• Saudi male employment is down across all categories other than the 30-44 age group since Q2 of 2018, with 10,339 less 55-59-year-old Saudi males in employment than in Q2 of 2018.

• There has been an increase in Saudi male employment in the 30-44 age group, with a total of 16,212 more Saudi males in jobs (1.74%).

• Other than an increase in the 35-39 (0.64%) and 65+ (6.35%) age groups, employment for Saudi females is also down across all age categories since Q2 of 2018, with 10% less Saudi females aged 15-19 and 6.76% less Saudi females aged 20-24 in employment than in Q2 of 2018 (a total of 6,593 jobs).

There are also 10.61% less Saudi females in the 55-59 age category in employment than in Q2 of 2018.

• The number of employed non-Saudi males has decreased across all age categories since Q2 of 2018, with a net reduction of 823,498 jobs in Q2 of 2019.

• The proportionate decrease of non-Saudis employed is more concentrated with in younger age groups.

There have been some positive indications in Q2 of 2019 with modest increases in some age groups for both Saudi males and females, despite the overall net reduction in employment since Q1 of 2019 across both genders. The employment of non-Saudi nationals has also increased in some age groups for both males and females:

• There was a steady increase in employment for Saudi males aged 30-44, totalling an increase of 3,695 jobs (0.39%).

• In Q2 of 2019 there are 13,627 more employed individuals recorded in the 20-24 category, an increase of 2.51% on Q1 of 2019, although this includes both Saudi and non-Saudi nationals.

• There was a notable increase in young non-Saudi males employed in Q2, with 23,804 more employed in the 20-24 category than in Q1 2019, an increase of 11.70% for this age group, while there was a reduction of 10.46%of non-Saudi males employed in the 15-24 category. This equates to a net reduction of only 91 jobs.

• There was a slight increase in the number of non-Saudi males in the 55-59 category in Q2 of 2019, a net increase of 1,509 jobs.

• Q2 of 2019 has also seen an increase in non-Saudi females working in the 20-24 category, with an increase of 763 workers (10.43%). There were also modest increases

for non-Saudi females in the 25-29 and 35-39 age categories, with an in crease of 1.31% and 0.20% respectively.

• As with the quarterly comparison from Q1 of 2019, the number of non-Saudi females employed since Q2 of 2018 has increased, with the increases observed across seven age categories. Proportionately this is observed to the greatest extent in the 35-39 and 40-44 age categories at 8.17% and 8.52% respectively.

• There has been a net increase of 9,489 non-Saudi females employed since Q2 of 2018, an increase of 3.95%.

5

Saudi Employment Trends

Overall Unemployment Rate for Saudi Nationals

87.5%

87.7%

Q1 of 2019 Q2 of 2019

7

• 65.6% of Saudi national employees are male and 34.3% are female, a decrease of 0.2% in female employment sinceQ1 of 2019.

Of the 3,090,248 employed Saudi nationals, the highest proportion continue to work in the private sector, at 54.1%, while 45.9% of Saudi workers are employed within the public sector. • 1,419,348 Saudi nationals are employed in the Public Sector, up 7,002 on Q1 of 2019.

• 1,670,900 Saudi nationals are employed in the Private Sector, down 28,783 on Q1 of 2019.

The largest movements within the Saudi labour market in Q2 of 2019 were by non-Saudi workers, with 113,572 more expatriate workers in employment than in Q1 of 2019. This is on top of the additional 223,793 non-Saudis who entered employment in Q1 of 2019, resulting in

a total of 337,365 additional expatriate workers in the first six months of 2019. This represents an increase of almost 3.6% in the number of employed non-Saudis between Q4 of 2018 and Q2 of 2019.

• In total, there are 9,766,784 expatriate workers employed in Saudi Arabia, up from 9,653,212 in Q1 of 2019, an increase of 1.17%.

• Non-Saudi males employed in Q2 of 2019 stood at 8,529,419, an increase of 71,220 (0.8%) on the Q1 of 2019 figure of 8,458,199.

• For females the number of non-Saudis in work was 1,237.365, an increase of 42,352 on Q1 of 2019. This represents an increase of 3.5%.

Q2 of 2019 saw an 8.57% rise in the number of non-Saudi Domestic Workers within the Kingdom, with an increase of 245,476 between Q1 of 2019 and Q2 of 2019. The figure rose to 3,109,173 in Q2 of 2019 from 2,863,697 in Q1 of 2019. There are 203,220 more males and 42,256 more females in employment within the Kingdom in comparison with Q1 of 2019.

• There are 126,713 more ‘Drivers’ and 112,036 more ‘Servants and House Cleaners’ compared to Q1 of 2019.

• In Q2 of 2019, a total of 552,430 Work Visas were issued, of which 527,550 were classed as ‘Personal’ or ’Private’ (not ‘Government’).

• Over 25% more Work Visas were issued in Q2 of 2019 compared to Q1 of2019, when the figure was 390,828.

• There has been a 28% increase in the number of non-Saudi Domestic Workers between Q2 of 2018 and Q2 of 2019, from 2,421,103 to 3,109,173. Further detailed investigation is required to understand the context and drivers for the overall rise in the number of non-Saudi workers within the Kingdom between Q2 of 2018 and Q2 of 2019.

Graduate unemployment remains a residual challenge, particularly for females. By educational attainment, the largest group affected by unemployment continues to be female Saudi graduates, with almost 68% of unemployed females holding a bachelor’s degree. There are 28,786 more Saudi females with a bachelor’s seeking employment in Q2 of 2019 than in Q1 of 2019. • 67.8% of Saudi female jobseekers hold a bachelor’s degree - the highest educational group amongst Saudi unemployed females.

• 48.2% of unemployed Saudi males has a secondary or equivalent education – the highest educational group amongst Saudi unemployed males, while 26.7% of unemployed Saudi males hold a bachelor’s degree.

• 97.5% of unemployed Saudi females have never worked, while the figure for males is 87.2%.

Non-Saudi Employment Trends

Educational Attainment Trends

97.5%

Fem

ale

87.2%

Mal

es

Unemployment Saudis

Regional Trends

9

• Non-Saudi female employment has fallen since Q2 of 2018 in all other regions, most notably in Qassim (8.02%), Asir (6.56%) and Hail (5.74%).

• Increases in non-Saudi female employment were seen in Riyadh (1,503 jobs) and Asir (33 jobs). All other regions saw a reduction in non-Saudi female jobs in Q2 of 2019.

• There are 203,220 more non-Saudi male domestic workers in Q2 of 2019 than in Q1 and 42,256 more non-Saudi female domestic workers.

• Non-Saudi male domestic workers have increased by 25.05% since Q2 of 2018, while female domestic workers have increased by 36.30% since Q2 of 2018.

• The regions with the biggest net reductions in non-Saudi male jobs since Q2 of 2018 were Riyadh (185,266) and the Eastern Province (150,485 jobs).

• While non-Saudi male employment is recorded at 823,498 less jobs than in Q2 of 2018, non-Saudi domestic workers are reported to have increased by 25.05% over the same period – an additional 425,055 jobs.

• Non-Saudi female employment has increased overall since Q2 of 2018, underpinned by more non-Saudi female workers recorded in 6 regions;Riyadh (10.66%), Eastern Province (4.16%), Tabuk (6.20%), Northern Borders (1.93%), Jazan (0.74%) and Al Jouf (1.84%).

• There are 9,489 (3.95%) more non-Saudi females employed in Q2 of 2019 than there were in Q2 of 2018. The greatest increase in non-Saudi female employment since Q2 of 2018 has been in Riyadh where 11,942 more non-Saudi females are now employed.

• Non-Saudi female employment has fallen since Q2 of 2018 in all other regions, most notably in Qassim (8.02%), Asir (6.56%) and Hail (5.74%).

Regional employment trends between Q1 and Q2 of 2019, and also between Q2 of 2018 and Q2 of 2019, demonstrate total employment for Saudi males and females has reduced. The number of non-Saudi males has decreased sharply since Q2 of 2018 while the number of non-Saudi females has increased. A breakdown of trends by region is detailed below:

• Total employment is down in every single region with a total of 153,685 less people employed across the regions than Q1 of 2019 and 849,104 less people employed since Q2 of 2018.

• The regions with the greatest proportional percentage decrease in employment since Q2 of 2018 were Qassim (17.81%), Hail (16.77%) and Najran (15.97%).

• The regions with the greatest actual decreases in total employment since Q2 of 2018 were Makkah (251,043 jobs), Riyadh (160,662 jobs) and the Eastern Province (154,277 jobs).

Employment of Saudi males has fallen across all regions other than Riyadh since both Q1 of 2019 and Q2 of 2018.

• Saudi male employment has decreased in every region in comparison to both Q1 of 2019 and Q2 of 2018, other than in Riyadh which has shown only a very modest increase of 0.10% since Q1 of 2019 (799 jobs) and 0.40% (8,543jobs) since Q2 of 2018.

• There are 132,000 less non-Saudi males in employment in Q2 of 2019 compared to Q1, impacting all regions including Riyadh (10,230 jobs), Makkah (44,318 jobs), Eastern Province (27,891 jobs), Najran (2,497 jobs) and Hail (4,734 jobs).

• A total of 25,225 less jobs were recorded for Saudi males in Q2 of 2019 compared to Q2 of 2018.

Employment of Saudi females has fallen across all regions since Q1 of 2019, and in all but 4 regions since Q2 of 2018.

• Saudi female employment has decreased in every region since Q1 of 2019, most notably in Riyadh (2,289 jobs), Makkah (5,886 jobs), Madinah (1,667 jobs) and Eastern Province (1,652 jobs). There has also been a net reduction of Saudi female employment across all regions since Q2 of 2018, equivalent to 9,870 jobs (0.92%).

• Female employment has decreased in all but 4 regions since Q2 of 2018. Increases were seen in Riyadh (4,119 jobs), Eastern Province (2,311 jobs), Tabuk (131 jobs) and Al Jouf (262 jobs). • There has been a decrease in female employment in all other regions since Q2 of 2018, most notably in Hail which has seen a 6.14% reduction in Saudi females employed year-on-year.

Employment amongst non-Saudi males and non-Saudi females continues to fluctuate as Domestic Workers increase significantly.

• Non-Saudi employment decreased overall from Q1 of 2019 to Q2, with a net decrease of 132,000 jobs for non-Saudi males and an increase of 96 jobs for non-Saudi females. • The greatest percentage reduction in employment for non-Saudi males in Q2 of 2019 from Q1 of 2019 was in Hail (5.37%), followed by Najran (4.85%).

• Recorded employment of non-Saudi males has fallen steeply across all regions since Q2 of 2018, with a total of 823,498 less non-Saudi males employed in Q2 of 2019 than there were in Q2 of 2018.

• Most notably there have been reductions in the number of non-Saudi males employed in Hail (22.78%), Qassim (22.68%), Northern Borders (22.66%) and Najran (21.80%).

• The regions with the biggest net reductions in non-Saudi male jobs since Q2 of 2018 were Riyadh (185,266) and the Eastern Province (150,485 jobs).

• While non-Saudi male employment is recorded at 823,498 less jobs than in Q2 of 2018, non-Saudi domestic workers are reported to have increased by 25.05% over the same period – an additional 425,055 jobs.

• Non-Saudi female employment has increased overall since Q2 of 2018, underpinned by more non-Saudi female workers recorded in 6 regions; Riyadh (10.66%), Eastern Province (4.16%), Tabuk (6.20%), Northern Borders (1.93%), Jazan (0.74%) and Al Jouf (1.84%).

• There are 9,489 (3.95%) more non-Saudi females employed in Q2 of 2019 than there were in Q2 of 2018. The greatest increase in non-Saudi female employment since Q2 of 2018 has been in Riyadh where 11,942 more non-Saudi females are now employed.

This increase is consistent with the targeted growth of Arts, Entertainment and Recreation in the Kingdom as part of the Quality of Life Programme, under Saudi Vision 2030. It is notpossible to draw comparison of employment in this sector from 2018 data due to the lack of reporting on sector-specific data for Arts, Entertainment and Recreation previously.

• Steady increases in Saudi Female Jobs, Steady decreases in non-Saudi jobs:

Saudi Female employment has risen steadily in Q2 of 2019, with more jobs for Saudi females reported in Transportation and Storage, Accommodation and Food Service Activities, Information and Communication, Financial anInsurance Activities, Real Estate Activities, -Professional Scientific and Technical Activities. Other than Administrative and Support Service Activities where there has been an increase, non-Saudi employment across all of these sectors has decreased since Q1 of 2019.

• More Saudis in Mining and Quarrying:

There was an increase in the reported number Mining and Quarrying sector since Q1 2019. This is a continuation of the trend seen since Q2 of 2018, with the employment of Saudi males and Saudi females up by 5.86% and 11.55% in the Mining and Quarrying industry since Q2 of 2018 respectively.

• Increases in non-Saudi female employment were seen in Riyadh (1,503 jobs) and Asir (33 jobs). All other regions saw a reduction in non-Saudi female jobs in Q2 of 2019.

• There are 203,220 more non-Saudi male domestic workers in Q2 of 2019 than in Q1 and 42,256 more non-Saudi female domestic workers.

• Non-Saudi male domestic workers have increased by 25.05% since Q2 of 2018, while female domestic workers have increased by 36.30% since Q2 of 2018.

The average wage for Saudi nationals in Q2 of 2019 was SAR 10,342, an increase of SAR 43 or 0.4% in comparison to Q1, although Saudi female salaries reduced while Saudi males saw an increase. Wages for Saudi males increased by an average of SAR 72 between Q1 and Q2 of 2019, from 10,503 to SAR 10,575. This represents an increase of 0.68%. In comparison with Q2 of 2018, the male wage has risen from SAR 10,430 to SAR SAR 10,575, representing an increase of 1.39%.

• For Saudi females, their salaries decreased from SAR 9,442 to SAR 9,431 between Q1 and Q2 of 2019, a reduction of 0.11%. • In comparison with Q2 of 2018, Saudi female salaries increased by SAR 19, from SAR 9,412 to SAR 9,431, representing an increase of 0.2%. • In terms of working hours, the average number remained static at 43.5, however females worked slightly less than in Q2 of 2019 (at 41.1 hours) when compared to Q1 of 2019 (41.5 hours).

• For males, Q2 of 2019 saw an increase from 43.8 to 43.9 hours. • Non-Saudi wages increased from SAR 3,980 to SAR 4,048 between Q1 and Q2 of 2019 – an increase of 1.7%.

• In the 12 months between Q2 of 2018 and Q2 of 2019, non-Saudi salaries increased by 7.8%, from SAR 3,755 to SAR 4,048 per month, a net increase of SAR 293. • The average wage for an expat male is SAR 4,152, up from SAR 3,980 in the previous quarter – an increase of SAR 172 or 4.3%.

• An expat female earns an average of SAR 3,104, an increase of SAR 204, which equates to an increase of 7% on the Q1 of 2019 salary of SAR 2,900.

There have been no significant changes since Q1 2019 in the employment of Saudi males across all sectors included in the survey. Changes in the way that sector-specific data is recorded since 2018 mean that direct data yearly comparisons in some sectors are not possible.

87.15% more non-Saudi males and 54.17% more non-Saudi females did not specify their sector of employment than in Q1 2019, a total of 31,184 males and 74 females. Reporting of specific employment sectors for Saudi nationals increased by 29.88% for males and 24.07% for females with just 1,396 males and 429 females reporting non-specified employment sectors.

There have been some positive and some negative trends between Q1 and Q2 of 2019. These are detailed further below:

• Arts, Entertainment and Recreation – Saudi 2030 Vision:

Q2 of 2019 saw a notable increase in employment reported in the Arts, Entertainment and Recreation sector since Q1 of 2019, particularly among female participants,with an increase of those employed by 5.19% and 8.57% for Saudis and non-Saudis workers in this sector respectively.

Wage Trends

Sectoral Trends

11

SAR 10,500

SAR 10,450

SAR 10,550

SAR 10,600

SAR 10,400

Q2 of 2018 Q2 of 2019

Saudi National Average Earnings

• Accommodation and Food Service Activities – Less non-Saudis, more Saudis employed:

There was also a reduction in the number of non-Saudis (males and females) undertaking Accommodation and Food Service Activities in the Kingdom, with 4,037 less jobs in this sector being carried out by non-Saudi nationals. Saudi employment in the sector increased by 731 jobs since Q1 of 2019.

• Financial and Insurance Activities and Real estate Activities – Female employment is up:

Saudi female employment in Financial and Insurance Activities and Real Estate Activities is up by 1.01% and 1.11% since Q1 of 2019 respectively. Non-Saudi females employed in these sectors also increased by 3.63% and 4.85% respectively. Males employed in both industries, both Saudi and non-Saudi employees, decreased over the same reporting period by 3.70% and 2.29% (non-Saudis nationals) and 0.87% and 0.04% (Saudi nationals). Overall employment in both sectors fell, by 828 jobs (Financial and Insurance Activities) and 560 jobs (Real Estate Activities).

• Education – Less non-Saudis employed, but also less Saudis employed:

There has been a reduction in employment within the Education sector, for both Saudi non-Saudis. 4,891 less non-Saudi nationals report employment in the Education sector in Q2 of 2019 compared with Q1 of 2019, while

10,205 less Saudi nationals reportemployment in the Education sector over the same period education sector for both Saudi nationals and non-Saudi nationals.

• Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles – One to watch:

There was an increase in Q2 of 2019 of non-Saudis employed in Administrative and Support Service Activities, 4.46% for males and (a total increase of 39,535 jobs for non-Saudis in this sector). Other sectors saw a marked decrease in non-Saudi employment in Q2, such as Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles which saw a net reduction of 43,500 jobs (2.70%) in Q2 of 2019 compared to Q1. The reduction in non-Saudis employed could potentially have been impacted by the Saudisation initiative which is set to take effect in this industry. While the ambition is to replace non-Saudis employed within Wholesale and Trade Retail; Repair of Motor Vehicle and Motorcycles, increased Saudi employment in the sector remains to be seen, with Saudi employment also decreasing in Q2 of 2019 compared to Q1.

• Construction – Employment continues to decrease:

There has been a continued decrease in employment reported in the construction industry, for both Saudi and non-Saudi males respectively, visible from Q1 of 2019 (down 3.37% for Saudi males and 5.04% for non-Saudi males) and Q2 of 2018 (down 31.07% for Saudi males and 35.39% for non-Saudi males). The Construction industry represents over 24% of total employment in Saudi Arabia, therefore this reported decrease in employment is significant.

• Agriculture, Forestry and Fishing declines:

Reported employment in Agriculture, Forestry and Fishing declined during Q2 of 2019 for both males and females, Saudi nationals and non-Saudis. Total employment in this sector in the Kingdom stands at 82,361, down from 94,071 in Q1 2019 and 95,484 in Q2 of 2018.

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