Saudi Arabia’s Industrial Production Index (IPI) rose by 1.6 percent in July compared to the same month last year, fueled by robust manufacturing activity, according to the General Authority for Statistics (GASTAT). The IPI reached 106.2 points for July, marking a significant uplift driven by a 4.6 percent increase in manufacturing activities.
GASTAT attributed this growth primarily to notable surges in the production of chemical products and food items, which increased by 5.7 percent and 10.1 percent, respectively. This expansion in the manufacturing sector is crucial for advancing Saudi Arabia’s Vision 2030 objectives, which aim to diversify the economy and reduce its dependency on oil.
Despite the overall increase, GASTAT reported a 0.8 percent decline in mining and quarrying activities year-on-year in July. This decrease is linked to Saudi Arabia’s strategic decision to cut oil production to 8.9 million barrels per day in accordance with OPEC+ agreements. The index for oil-related activities decreased by 1.1 percent, while non-oil activities saw an 8.2 percent increase, driven by growth across various non-oil sectors.
To stabilize the market, Saudi Arabia implemented a reduction in oil production by 500,000 barrels per day in April 2023, a measure that has been extended through December 2024.
In addition to manufacturing, other sectors experienced growth. Activities related to electricity, gas, steam, and air conditioning saw an 8.2 percent year-on-year increase in July. Similarly, water supply, sewerage, waste management, and remediation activities grew by 1.1 percent.
On a month-on-month basis, manufacturing activity saw a 1.7 percent increase, bolstered by a 3.3 percent rise in the production of coke and refined petroleum products. Mining and quarrying activities also rose by 1.3 percent compared to June.
Overall, the IPI reflects positive industrial output trends, with the index for oil and non-oil activities rising by 1.6 percent and 1.8 percent, respectively, based on month-on-month data. The IPI serves as a key economic indicator, measuring changes in industrial output through production surveys.
