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The local industrial production index (IPI) grew 5% y-o-y in October as manufacturing activity increased across the board, putting the measure back in growth territory following a brief dip in September, according to the General Authority for Statistics’ (Gastat) monthly report (pdf). The index also posted a 0.4% increase on a monthly basis. The IPI analyzes survey data to track changes in industrial production volumes across the Kingdom.
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The manufacturing sub-index was up 12.4% y-o-y on the back of a 32.6% increase in the manufacture of coke and refined petroleum products. The component was also propped up by 4.8% growth in food products and a 0.6% increase in chemicals and chemical products. Manufacturing makes up 35% of the overall IPI, making it the second-heaviest component after oil and minerals. October’s performance marks a rebound from the previous month’s 0.5% dip that interrupted seven months of back-to-back growth.
Mining and quarrying activity climbed 0.4% y-o-y in a turnaround from last month’s plateau. The boost came on the back of an increase in oil production to 8.97 mn bbl / d, up from 8.94 mn bbl / d in October of last year. The mining and quarrying sectors make up 61.4% of the overall IPI.
REMEMBER- Riyad Capital had indicated in September that Saudi crude oil production was expected to begin ramping up this quarter towards a targeted 10 mn bbl / d by 4Q 2025. However, Opec’s latest decision to put off output hikes beyond 1Q 2025 will likely delay the anticipated acceleration in Saudi oil output.
The index for non-oil activities was up 4%, driven by broad-based growth across all non-oil activities. Meanwhile, the index for oil was up 5.4%.
IN CONTEXT- Saudi’s non-oil business sector logged its strongest performance since July 2023 last month, with the headline PMI figure hitting 59.0 and marking four consecutive months of gains as solid consumer demand drove new orders despite a ramp up in cost pressures.
Utilities are on the up: The sub-index for electricity, gas, steam, and air conditioning supply activity grew 6.2% y-o-y, while water supply, sewage, and waste management and remediation activities were up 8.4% compared to the same month last year.
IN OTHER MANUFACTURING NEWS-
UAE-based Gulf Pharma Industries (Julphar) will set up a SAR 300 mn pharma and biotech manufacturing facility in Saudi Arabia, the company said in a filing to the Abu Dhabi Securities Exchange (ADX) (pdf).
The details: “The greenfield project will include complex biologics, sterile, and general formulation drug manufacturing” that abide by Saudi, European, and US standards, the disclosure said. Work on the project is slated to kick off in 1Q 2025.
ICYMI: The ADX-listed pharma player sold wholly-owned subsidiary Zahrat Al Rawdah Pharma to Saudi retailer BinDawood in a SAR 444.1 transaction last month.
