Employment across Kuwait’s non-oil sector rose at the fastest pace since 2018 in June as firms continued to see increases in output and new orders. Ongoing pressure on capacity was the primary driver behind the expansion in staffing levels in Kuwait.
Although input costs continued to rise sharply, inflation eased for the third month running. Meanwhile, efforts to protect profit margins led firms to increase selling prices, but charges rose only modestly amid competitive pricing policies.
The S&P Global Kuwait Purchasing Managers’ Index (PMI) remained above the 50.0 no-change mark for the 17th consecutive month in June. At 51.6, the index declined from 52.4 in May, signaling a modest improvement in business conditions.
Business activity rises
Business activity across Kuwait’s non-oil sector increased solidly, however, to a lesser extent than in May. Firms cited successful advertising as a key driver behind the rise in input. Firms reportedly used a wide range of marketing channels, including social media, and competitive pricing to expand business.
New business from abroad also contributed to the rise in total new orders. In fact, the expansion was the fastest since the survey began in September 2018.
Employment surges
Employment in Kuwait’s non-oil sector also rose at the fastest pace on record as companies responded to higher workloads by taking on extra staff. However, the rate of job creation was still only modest and not sufficient to prevent a further accumulation of backlogs of work given the strength of new order growth. The rise in outstanding business was among the steepest in the series’ history.
Read: Economic growth stable but several risks could destroy ‘sandcastle economy’: Saxo Bank
Advertising raises input costs
Kuwait’s non-oil sector businesses raised spending on advertising in June which led to an increase in input costs. Firms also cited higher transportation costs and rising prices for air conditioning and vehicle maintenance as reasons for the rise.
That said, the rate of inflation eased for the third month in a row and was the weakest since the beginning of 2024. Meanwhile, staff cost inflation hit a three-month high.
The increase in new orders also pushed companies to expand their purchasing activity. In some cases, firms bought items in bulk with the aim of raising their inventories. Both input buying and stocks of purchases increased more quickly in June than in May.
Although easing to a four-month low, the success of marketing and improving economic conditions supported Kuwait’s non-oil sector businesses’ confidence in the yearly outlook for business activity.
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