Manufacturing Sector Contributes 2.1% to Saudi Industrial Growth

The Industrial Production Index (IPI) in Saudi Arabia rose by 2.1 percent year-on-year in December 2024, driven by strong manufacturing activity and waste management services.

Saudi Arabia’s industrial sector continued its expansion in December 2024, with the Industrial Production Index (IPI) rising by 2.1 percent year-on-year, driven by strong manufacturing activity and waste management services, according to the latest data from the General Authority for Statistics.

The report highlights that non-oil activities grew by 4 percent annually, reflecting widespread growth across key sectors, excluding electricity and gas supply. Manufacturing stood out as the primary driver, recording a significant 6.3 percent year-on-year increase, reinforcing Saudi Arabia’s commitment to economic diversification under Vision 2030.

Saudi Industrial Production Index – December 2024

• 2.1 percent – General Index
• 6.3 percent – Manufacturing Industry
• 0.8 percent – Water Supply, Sewerage, Waste Management, and Remediation Activities
• -0.4 percent – Mining and Quarrying
• -1.9 percent – Electricity, Gas, Steam, and Air Conditioning Supply

Manufacturing and non-oil growth drive industrial expansion

The strong performance in manufacturing and non-oil activities signals a structural shift in Saudi Arabia’s economy, positioning the country as a key player in the global industrial landscape. The expansion was largely fueled by gains in key industries:

• Coke and Refined Petroleum Products: Surged by 9.3 percent, reflecting the importance of fuel and chemical production in the country’s economic transformation.
• Chemical Manufacturing: Grew 4.8 percent, contributing to Saudi Arabia’s strengthening role in global petrochemicals.
• Food Industry: Increased by 8.8 percent, showcasing resilience and demand for food production and processing.
• Paper Products: Expanded 8.7 percent, indicating growth in packaging and industrial materials.
• Electrical Devices: Recorded a 10.5 percent increase, highlighting advancements in technology and electronics manufacturing.

Mixed performance in mining and utilities

Despite manufacturing’s robust growth, mining and quarrying—Saudi Arabia’s largest industrial sector—declined by 0.4 percent year on year in December 2024. The sector also saw a 0.2 percent month-on-month decrease, reflecting reduced oil production, which fell to 8.91 million barrels per day (bpd) from 8.94 million bpd in December 2023.

Meanwhile, the water supply, sewage, and waste management sector grew 0.8 percent annually but registered a 1.9 percent monthly decline. The electricity, gas, steam, and air conditioning supply sector reported a 1.9 percent annual decrease, with a sharper 15.6 percent monthly drop.

Economic diversification and industrial expansion

Saudi Arabia’s industrial growth aligns with its broader economic transformation strategy under Vision 2030, which aims to diversify revenue sources beyond oil. The refining and petrochemical industries have emerged as crucial pillars of this shift, bolstering both domestic and export markets.

The Kingdom’s growing production of refined fuels, such as gasoline, diesel, and jet fuel, plays a vital role in meeting domestic energy needs while increasing non-oil export revenues. Additionally, coke production—a key input for the steel industry—strengthens Saudi Arabia’s industrial base, supporting construction, infrastructure, and manufacturing sectors.

By fostering innovation, technology adoption, and job creation, these industries are set to enhance Saudi Arabia’s global competitiveness while reinforcing its ambition to become a leading industrial hub. As manufacturing continues to drive economic growth, Saudi Arabia remains committed to expanding its industrial base and attracting strategic investments, further solidifying its position in the global marketplace.

• Previous Article Oman Expands Industrial Landscape with New Economic Zones
• Next Article 沙特阿拉伯 vs 阿联酋：在海湾地区设置区域总部的外国直接投资分析