Saudi employment growth plummets amid crackdown on illegal workers

Growth in Saudi Arabia’s employment market saw a sharp decline in April, data from HSBC show, amid an intensifying crackdown on illegal workers in the Kingdom.

Employment growth dropped along with business activity in the country’s non-oil private sector, according to the seasonally adjusted SABB HSBC Saudi Arabia Purchasing Managers' Index.

The HSBC index registered Saudi employment growth at 50.2 points during April, the lowest level since October 2011, and marking a sharp decline from the 53.4 points during March 2013.

That means that, while employment is still growing in Saudi, it is approaching the 50-point mark that separates expansion from contraction.

The sharp decline in growth may have been the result of the intensifying crackdown on illegal foreign workers by Saudi authorities, Reuters reported. Tens of thousands of workers have been deported in recent months.

Business activity growth in the non-oil private sectors of both Saudi Arabia and the UAE touched a five-month low, according to HSBC surveys.

Firms in Saudi Arabia reported an easing in the rise in new orders, with the business-growth index falling to 58.0 points in April from 58.9 points in March.

In the UAE, new orders rose at their slowest pace in a year, according to the HSBC UAE Purchasing Managers' Index.

The UAE index fell to 54.0 points last month from 54.3 in March, according to the survey of 400 private-sector firms.

"It's another solid reading that strongly suggests the UAE economy is maintaining momentum well. The softer export reading is a concern, but overall new orders are still strong, employment is rising and output is up," said Simon Williams, chief economist for the Middle East at HSBC.

"We continue to look for overall growth of around 4 percent this year, with Dubai likely to be the outperformer."

Employment growth across the UAE's non-oil private sector rose to a still-modest 53.3 points.