Saudi Arabia:

RIYADH: Manufacturing of chemicals and food items helped drive Saudi Arabia’s Industrial Production Index up 0.9 percent in May compared to the previous month, official data showed.

According to the General Authority for Statistics, the 0.8 percent rise in this sector helped push the index to 106.3 points in the fifth month of 2024.

Compared to April, the manufacturing of non-metallic products also increased by 0.9 percent, while the production of coke and refined petroleum products decreased by 0.4 percent during the same period.

Saudi Arabia’s growth in the manufacturing sector is crucial to achieving the goals outlined in Vision 2030, as the Kingdom is steadily diversifying its economy by reducing its reliance on oil.

“In the manufacturing sector, Saudi Arabia will work toward localizing renewable energy and industrial equipment sectors,” according to the Kingdom’s Vision 2030 website.

The IPI is an economic indicator that reflects relative changes in the volume of industrial output. It is calculated based on production surveys.

However, Saudi Arabia’s overall IPI saw an annual decrease of 2.9 percent in May.

According to GASTAT, this decline in IPI was driven by a fall in mining and quarrying activities, which dropped by 9.7 percent year-on-year in May.

This dip was attributed to Saudi Arabia’s decision to decrease its oil production to 8.9 million barrels per day in May 2024, aligned with an agreement by OPEC and its allies, known as OPEC+.

To maintain market stability, the Kingdom reduced its oil output by 500,000 barrels per day in April 2023, and this cut has now been extended until December 2024.

“The index for oil activities in May 2024 decreased by 8.4 percent compared to the same month of the previous year due to the decline in oil production. While the index for non-oil activities increased by 12.8 percent, supported by an increase in all non-oil economic activities except for water activities,” said GASTAT in the report.

The analysis revealed that manufacturing activities in the Kingdom witnessed a growth of 8.2 percent in May compared to the same month of the previous year, while electricity, gas, steam, and air conditioning supply operations rose by 6.6 percent during the same period.