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Creating new jobs for the highly educated youth will be the main challenge for Saudi Arabia’s labor market going forward, with the country adding nearly 230,000 fresh graduates every year, Jadwa Investment said in a report.
The latest unemployment figures show that the highest rates are among the youth (aged between 15 and 24) stood at an average of 54.1 percent in Q1 2018, with female youth unemployment at 75 percent.
“As the economy goes through structural changes, creating new jobs for the youth will not be an easy task,” Jadwa said.
“However, a new group of jobs are anticipated to be created as the local economy is seeking new opportunities, through attracting foreign investments in various sectors, and supporting a number of local sectors, such as tourism and entertainment, and non-oil manufacturing,” it added.
According to the labor market update for Q1 2018 from General Authority for Statistics, unemployment rate rose slightly to 12.9 percent, from 12.8 for the last two quarters of 2017.
Also during Q1, the labor market saw the implementation of expat levies, which raised expat labor costs, six months after the implementation of expat dependent fees, Jadwa said.
The total number of foreigners in the Saudi labor market has declined by around 796,000 since the start of 2017, with about 221,000 leaving the market during Q1 2018, it added.
On a sector level, data showed that all sectors saw a drop in the number of foreign workers, with construction seeing the biggest decline.
“The number of foreigners leaving the market in Q1 2018 was not equally met by the number of Saudis hired,” the report said.
“We believe that this divergence is due to the wage gap between Saudis and expats,” it added.
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