By Manoj Nair
Dubai: Saudi businesses are continuing to add new jobs at top speed – but this is also leading to a ‘record rise’ in their wage costs. Across sectors, new jobs are seeing the ‘sharpest rise’ since May 2011, according to the latest PMI data. This is where the cost factor kicks in. “This surge in demand for staff contributed to a record increase in wage costs, which added to overall cost pressures and led to a renewed rise in output prices,” according to a report by Riyad Bank. Adding to this is the cost of purchases, which in June rose at the fastest since February 2025, in part ‘driven by stronger demand and rising geopolitical risks’. “Despite these cost challenges, firms broadly raised their selling prices, reversing the declines seen in May and signaling an improved ability to pass on higher costs to customers,鈥 said Naif Al-Ghaith, Chief Economist at Riyad Bank. The Saudi travel and tourism sector is, these days, one of the biggest hirers in the Kingdom, with the launch date of Riyadh Air coming closer on the horizon. According to hiring consultants, there is a whole slew of aviation facing businesses that are also adding to their payrolls. Saudi June PMI The Saudi non-oil economy saw its June PMI climb to 57.2 from 55.8 in May. The higher reading is ‘supported by higher output levels, rising demand, and an active labour market’, says Riyad Bank. “Firms largely linked the pickup in activity to improving sales, new project starts, and better demand conditions, although the pace of output growth was softer compared to previous highs.” (The Purchasing Managers Index is a composite score that tallies business spending patterns, order intake and output, inventory levels as well as hiring. A score of 50 plus shows businesses in expansion drive.)”Sentiment among non-oil businesses remains highly positive,” said Al-Ghaith. “Confidence about future activity climbed to a two-year peak, supported by healthy order pipelines and stronger domestic economic conditions. “However, cost pressures became more pronounced in June. Staff costs rose at a record pace as firms worked to retain talent, while purchase prices saw their fastest increase since February, partly driven by stronger demand and rising geopolitical risks.”