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The Industrial Production Index (IPI) was down 2.9% y-o-y in May 2024 on the back of a decline in mining and quarrying activity — the index’s heaviest-weighted competent, according to a General Authority for Statistics (Gastat) report (pdf). The index analyzes survey data to show volume changes in industrial production across the Kingdom.
Activity in the mining and quarrying sectors — which accounted for 61.4% of the overall IPI — fell 9.7% y-o-y, driven by a reduction in oil output which was down to 8.9 mn barrels per day (bbl / d) in May 2024.
Oil vs non-oil: The oil activities index fell 8.4% y-o-y due to the oil production drop, while the index for non-oil activities rose 12.8%, supported by an increase in all non-oil economic activities except for water projects.
IN CONTEXT- The Kingdom has voluntarily cut oil production by 1 mn bbl / d to stabilize the global market, as per its ongoing agreement with OPEC+ to slash oil production by a combined 3.7 mn barrels per day until October of this year.
Meanwhile, the sub-index for manufacturing climbed 8.2% y-o-y on the back of a 15.6% increase in food production and 10.0% growth in chemicals manufacturing.
Some utilities are up, others down: The sub-index of electricity, gas, steam, and air conditioning supply activity grew 6.6% y-o-y, while that of the water supply, sewerage and waste management, and remediation activity dipped 0.2% y-o-y.
On a monthly basis, the IPI rose 0.9% in May, with mining and quarrying activity up 0.1% m-o-m alongside activity increases in manufacturing by 0.8%, electricity and gas by 20.8%, and waste management by 2.2%. Oil activities remained stable m-o-m while non-oil activities grew 3.0% over the same period.
