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ANALYSIS

Private sector fuels job growth in Kuwait

Kuwait, June 26, 2013

While the civilian job growth in Kuwait recorded a solid increase of 4.4 per cent during 2012, the expatriate employment prospects were primarily driven by firmer private sector hiring, particularly in unskilled recruitment, a report said.

Population growth gained pace in 2012 boosted by a more solid increase in expatriate numbers as hiring in the private sector picked up, added the latest Economic Update from the National Bank of Kuwait (NBK).

By contrast, the population of Kuwaiti nationals saw its growth moderate, reflecting an ageing trend seen over the past two decades. Kuwait’s population grew by 3.4 per cent in 2012 to end the year at 3.82 million.

While general employment growth was stable during the year, it appeared to strengthen somewhat in the private sector. More Kuwaitis obtained employment in the private sector than the prior year. Meanwhile, in line with an improving economy, private sector growth boosted expatriate job growth, particularly in unskilled employment, said NBK.

Kuwaiti population growth continues to moderate

The population of Kuwaiti nationals grew by 2.5 per cent during 2012 to reach 1.21 million. This was the slowest rate of growth on record, with the slowing trend reflecting Kuwait’s aging population. On average, Kuwaiti nationals are tending to choose smaller families and are often delaying having children.

Despite the aging trend, the Kuwaiti population is still youthful by global standards. Over a third of Kuwaitis are under 15 years of age. In the last decade, this share has fallen from 41 per cent to 37 per cent. This compares to a global world average of 27 per cent and an average for wealthy economies of 22 per cent, the report said.

The number of births among Kuwaitis peaked in early 2011. Monthly births per 1,000 women aged 20-45 has declined from 14.8 in 2005, to 13.2 at the end of 2011. This ratio is likely to continue to fall in the coming years.

Kuwait’s expatriate population increased to 2.61 million by the end of 2012, 3.9 per cent higher than a year before. The proportion of non-Kuwaitis has remained mostly unchanged since 2007.

Employment growth in 2012

According to NBK, Overall employment in Kuwait grew by 3.2 per cent in 2012, a pace similar to 2011. Total employment reached 2.25 million, 83 per cent of which were expatriates. Kuwaiti nationals accounted for only 17 per cent of employment. This ratio has improved since 2007 when it stood at 15 per cent.

Kuwaiti civilian job growth has been somewhat more rapid recording an increase of 4.4 per cent in 2012, with a net increase of jobs of over 12,300. Annual job growth has been roughly similar over the last three years following the economic slowdown.

Job growth in the private sector strengthened in 2012. Nearly 3,000 more Kuwaitis worked in the private sector at the end of the year than did at the start. Employment growth in this sector accelerated to 5.9 per cent from 1.7 per cent the year before. Still, the proportion of Kuwaitis working in the private sector remained mostly stable at 18 per cent.

By contrast, the government sector generated fewer new civilian jobs in 2012. The net increase in civilian employment in this sector reached 8,500, down from 9,750 the year before.

Labour participation rate among Kuwaiti women rising

One of the notable trends visible over the last two decades has been the increasing role of women in the Labour market. This trend continued in 2012 with the proportion of 30-34 year-old women in employment rising to 84 per cent by the end of 2012. Ten years before, this ratio stood at 59 per cent. By comparison, men have a participation rate of 92 per cent.

Expatriate employment picks up in 2012

The year saw a further improvement in job growth among expatriates, which has been on a recovering trend since the economic slowdown in 2008 and 2009. The non-Kuwaiti workforce rose by 3.3 per cent in 2012, a net increase of nearly 60,000 jobs. The vast majority of these new jobs were in unskilled positions in the private sector.

At the end of 2012, 1.86 million expatriates worked in Kuwait. Nearly half were unskilled workers employed in the private sector. Another 30 per cent were domestic workers. Only around 15 per cent of the expatriate workforce was made up of skilled employees in the private sector. Meanwhile, the remaining 7 per cent were employed in the government sector.

According to the report, the year saw a small pickup in the growth of skilled expatriates working in the private sector, though the pace remained modest at 1.4 per cent. Skilled jobs in the private sector, which rose to 276,000, continued to be under pressure from a modest economic recovery and increasing Kuwaitization. Meanwhile, unskilled job growth topped 6.7 per cent in 2012.

Employment growth is expected to continue to pick up in the coming period especially as economic growth accelerates in the non-oil economy. Private sector employment in particular is likely to pick up steam resulting in job growth for both Kuwaitis and expatriates.

This will help reduce the burden on government hiring. It will also help generate further economic growth as higher income jobs increase in the country, noted the NBK Economic Update. – TradeArabia News Service




Tags: Kuwait | NBK | expatriate | Employment | Private sector |

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