Kuwait’s population growth moderates in first half of 2019
Expat private sector employment growth edges down to near historical lows
Population growth moderated in 1H19 on the back of even softer growth in the number of expatriates. Kuwaitization efforts and higher administrative fees have undoubtedly dampened expat employment prospects, which has in turn weighed down on expat growth.
According to the latest biannual release of demographic data, Kuwait’s population rose 2.1% y/y in June 2019 to reach about 4.7 million. The growth rate was lower than the 2.7% seen in 2018, mainly due to a decrease in expat growth, which stood at 2.1% y/y in June versus 2.8% y/y in 2018. Additionally, the number of expatriate dependents continued to decline, falling by a sharper 2.5% y/y in June 2019 versus the 1.3% y/y decline in 2018, amid historically softer employment growth and higher living costs.
Meanwhile, growth in the population of Kuwaiti nationals was broadly steady at 2.3% in June versus 2.4% in 2018, holding at 1.4 million.
Above average share of youth population highlights urgency for faster job creation
Despite the continued moderation in the rate of growth in the number of Kuwaitis under the age of 15, it still makes up more than a third of the population, compared to the MENA average of 30%. This increasingly illustrates the urgency for faster job creation in the years to come to improve the employment prospects for the large youth population that will eventually become part of the workforce. Moreover, growth in the number of nationals above the age of 15 has remained steady and firm at around 3% over the last couple of years.
Total employment growth subsides in 1H19 as expat numbers in the public sector continue to decline
Growth in total employment eased from 4.2% y/y in 2018 to 3.7% y/y in June 2019 (far below the rates seen in 2015-16), mainly on the back of continued declines in expat numbers in the public sector (-3.1% y/y), driven by Kuwaitization efforts. While Kuwaiti jobs growth held at a firm 3.5% y/y, expat employment growth slowed from 4.3% y/y in 2018 to 3.7% y/y in June 2019.
Private employment growth among expats also weakened slightly from 4.6% y/y in Dec 2018 to 4.1% y/y in June 2019. After factoring out domestic workers, the June 2019 figure appears even softer at 2.7% y/y versus 5.1% y/y in Dec 2018.
The softer expat employment growth figures in the private sector (excluding domestic workers) was led by slower hiring activity in the construction sector, in tandem with lower project activity during the same period. Indeed, hiring activity in this sector eased from 8.6% y/y in 2018 to 1.9% y/y in June 2019. In contrast however, hiring activity in the real estate sector remained strong, holding at a firm 13.4% y/y. These sectors including those related to domestic help, are likely to remain supportive of private employment growth among expats going forward, especially given that the Kuwaitization targets set for these activities remain low, as most of those working in these sectors are low-skilled laborers.