Saudi Arabia’s industrial production index (IPI) saw a 1.1 percent increase in April compared to the prior month, supported primarily by a 2.4 percent monthly increase in manufacturing activity. The latest data from the Saudi Arabia General Authority for Statistics (GASTAT) also reveals a 6.1 percent annual decline in the Kingdom’s IPI due mainly to a decline in mining and quarrying activity.
Mining and quarrying
The GASTAT report reveals a 14.1 percent decline in mining and quarrying activity in April 2024 compared to April 2023 due to a decline in Saudi Arabia’s oil production to 8.9 million barrels per day in April 2024. However, the index saw a 0.1 percent increase compared to March 2024.
The mining and quarrying sub-index holds a weight of 61.4 percent on Saudi Arabia’s industrial production index. Therefore, the sub-index has a significant impact on the country’s overall IPI. With the extension of the OPEC+ voluntary production cuts of 2.2 million barrels of crude oil per day into 2025, Saudi Arabia’s mining and quarrying index will likely remain on the lower end in the short term.
Manufacturing activity supports growth
Despite the decline in mining and quarrying impacting Saudi Arabia’s industrial production levels, the manufacturing sector balanced the annual decline with a 7.7 percent annual surge in manufacturing activity. Chemicals and chemical product manufacturing saw a 7.8 percent annual increase while food production saw a 15.8 percent annual increase in April 2024. However, the manufacturing of coke and refined petroleum products saw a 3 percent annual decline.
Month-on-month, Saudi Arabia’s manufacturing activity saw a 2.4 percent increase due to the 1.9 percent rise in the manufacture of coke and refined petroleum products. In addition, chemicals and chemical product manufacturing saw a 3.1 percent increase. Meanwhile, the manufacturing of food products and non-metallic products declined by 3.7 percent and 2.3 percent, respectively.
Notably, Saudi Arabia’s electricity, gas, steam and air conditioning supply activity saw an annual increase of 6.5 percent and a monthly increase of 2.8 percent. Meanwhile, the sub-index of water supply, sewerage, waste management, and remediation activities saw an annual decline of 2.8 percent and a monthly increase of 4.9 percent.
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