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Local industrial production index (IPI) rose 1.6% y-o-y in July — its first increase of the year — buoyed by the manufacturing and utilities sub-indexes, according to a General Authority for Statistics (GASTAT) report (pdf. The IPI analyzes survey data to show changes in the volumes of industrial production across the Kingdom.
The sub-index for manufacturing climbed 4.6% y-o-y, spurred by growth in the manufacturing of electric devices, which rose 16% y-o-y, as well as paper and paper products (+12% y-o-y), food production (+10.1% y-o-y), and chemicals (+5.7% y-o-y). Manufacturing accounts for 35% of the overall IPI, making it the second-weightiest component after oil and minerals. The latest IPI report marks the sixth consecutive month that manufacturing activity in the Kingdom rose y-o-y.
Despite these gains, mining and quarrying activity fell 0.8%, driven by a reduction in oil output, which was down to 8.9 mn bbl / d during the month. The mining and quarrying sectors account for 61.4% of the overall IPI. Mining and quarrying activity rose month-on-month, however, growing 1.3% compared to June.
BUT- Mining + quarrying activity could begin to rise again soon: Riyad Capital said in a report earlier this month that Saudi crude oil production is expected to increase to 10 mn bbl / d by 4Q 2025, starting next quarter.
Non-oil output was up, while oil output declined: The IPI for oil activities dipped 1.1%, but non-oil activities grew 8.2% y-o-y, reflecting a broad-based increase across non-oil sectors.
IN CONTEXT- The government has penciled 4.5-5.0% growth in non-oil GDP this year, with Moody’s Analytics pegging the figure at a lower 3-4% per year through 2030.
Utilities were also up across the board: The electricity, gas, steam, and air conditioning sub-index rose 8.2% y-o-y, while water supply and waste management activities increased by 1.1% y-o-y.
