KAPSARC analyzes impact of COVID-19 on the Saudi market in 24 job sectors

June 04, 2020

RIYADH — The King Abdullah Petroleum Studies and Research Center (KAPSARC) assessed, in a recent publication of an Instant Insight, the impact of COVID-19 on the Saudi labor market, and how jobs in 24 different sectors were affected by the current crisis.

KAPSARC’s initial assessment, which used the approach prepared by the Federal Reserve Bank in St. Louis, revealed that 39% of Saudi employees in the sectors mentioned in the paper are at risk of losing their jobs, as the bank classified the sectors into high-risk and low-risk sectors, whereas the percentage of non-Saudi employees rises to 93%, due to the increase in the number of foreign workers in job sectors that are most at risk of unemployment, reaching more than 9 million employees, while the number of Saudis in those sectors reaches more than one million Saudi employees.

The Instant Insight indicated that workers in the manufacturing, wholesale, retail, transportation, building, construction and hotel management sectors, in addition to arts and entertainment, are most at risk of unemployment during the COVID-19 crisis. While health sectors are less likely to be at risk of unemployment, as well as agriculture, mining, water and electricity supply, information, communications, financial and educational activities, government sectors and regional organizations activities.

The paper emphasized that despite the negative effects that the pandemic will have on the labor market, this represents a golden opportunity to change the structure and reform of the Saudi labor market in the way that the new settlement policies seek. It will be a strong motivation to organize the sectors that are most affected to attract Saudi men and women to work in them.

The paper also indicated that there are two factors that play a vital role in making certain sectors more at risk. These are the degree of its dependence on personal proximity, such as food and hospitality sectors, and the degree of its influence on the business cycle, such as building and construction sectors.

The Instant Insight is a new series of KAPSARC publications, which seeks to analyze current issues and important topics in economy, energy and environment issues locally and globally, and help decision-makers in assessing their implications on the macroeconomics and global markets.

Through its various research productions, KAPSARC aims to address global energy challenges, enhance the contribution of diversified energy sources, economic growth and prosperity, and support to achieve sustainable development and the Vision 2030 goals. The center has six different publications: research studies, Instant Insights, commentaries, data analyses, peer-reviewed scientific papers and podcasts.

The center made progress in the list of the best research centers regionally and globally, as it jumped 14 ranks in the ranking of the Middle East and North Africa research centers. It ranked 15th out of 103 research centers regionally, and 13th out of 60 research centers specializing in energy policy globally. — SG

June 04, 2020
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