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|23 July, 2018

Expats' massive exit weighs on Saudi construction sector

Massive exit came after Saudi authorities imposed fees on businesses hiring expats and on dependents

Image used for illustrative purpose. Foreign labourers work at the construction site of a building in Saudi Arabia

Image used for illustrative purpose. Foreign labourers work at the construction site of a building in Saudi Arabia

REUTERS/FAISAL NASSER

Riyadh: The Saudi construction sector was the most negatively impacted by exiting expatriate workers in the first quarter of 2018.

The massive exit came after Saudi authorities imposed fees on businesses hiring expats and on dependents. The step is part of a wide-ranging move to hiring Saudis or what is called Saudisation.

The number of foreign workers who left the kingdom was not equal to Saudi citizens who were hired to replace them, especially as Saudis would require higher salaries.

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"We can say that the first wave of foreigners leaving the country are the unskilled, low-wage labour, who have been made redundant by their employer due to rising labor costs,” Jadwa Investment said.

It further noted that there were about 221,000 foreign workers who left the kingdom in the first three months of the year.

"Looking ahead, with around 230,000 fresh university graduates every year, the Saudi labour market is mostly challenged with creating new jobs for the educated youth," Jadwa added in its research note.

On a separate note, the total number of Saudi workers rose to 12.9% during Q1-18, data released by the General Authority for Statistics (GASTAT) showed.

Source: Mubasher

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