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The local industrial production index (IPI) rose 1.0% y-o-y in August, on the back of growth in mining, manufacturing, and utilities, according to a report (pdf) from the General Authority for Statistics (Gastat). The IPI analyzes survey data to track changes in industrial production volumes across the Kingdom.
The manufacturing sub-index grew 1.1% y-o-y on the back of growth in furniture (+18.8%), chemicals and chemical products (+2.9%), paper and paper products (+14.5%), food (+12.9%), and other categories. Manufacturing makes up for 35% of the overall IPI, making it the second-heaviest component after oil and minerals. August’s performance marks the seventh consecutive month that local manufacturing activity rose y-o-y.
Mining and quarrying activity increased 0.8% y-o-y, marking a turnaround from last month’s 0.8% y-o-y fall. The boost came on the back of an increase in oil production to 8.99 mn barrels per day, up from 8.92 mn bbl / d in August of last year. The mining and quarrying sectors make up 61.4% of the overall IPI.
REMEMBER- Riyad Capital said last month that Saudi crude oil production is expected to begin ramping up this quarter towards a targeted 10 mn bbl / d by 4Q 2025.
The IPI for non-oil sectors grew 7.0% y-o-y in August, driven by broad-based growth across most non-oil activities. Meanwhile, the index for oil declined 1.4%.
IN CONTEXT- Non-oil activity was at a four month high in September, with the Kingdom’s headline PMI figure hitting 56.3, up from 54.8 in August. The uptick signals renewed confidence in the private sector following a period of slower growth in early 3Q.
Utilities was a mixed bag: The sub-index for electricity, gas, steam, and air conditioning supply activity grew 4.1% y-o-y, while water supply, sewage, and waste management and remediation activities dropped 0.9%.
