Recent figures have demonstrated a slight uptick in Saudi Arabia’s manufacturing sector, largely driven by an impressive surge in paper and associated products output. Despite this increase, the nation’s overall Industrial Production Index (IPI) experienced a slight decline of 0.2 percent in March on a month-to-month basis.
While paper production saw a 1.2 percent rise, contributing to an overall buoyant manufacturing scene, other sectors weren’t as fortunate. Notably, chemical manufacturing and basic metals production saw reductions of 2.6 percent and 0.6 percent, respectively.
Utility services, encompassing electricity, gas, steam, and air conditioning supply, also recorded a 3 percent drop from the previous month. Conversely, water supply, sewage treatment, and waste management activities witnessed a 2.1 percent rise.
An analysis by the General Authority for Statistics (GASTAT) indicated that the Kingdom’s IPI in March marked an 8.7 percent year-on-year decline. This was primarily due to a decrease in mining and quarrying activities, which have a significant impact on the overall industrial trend due to their substantial weight in the index.
“The mining and quarrying sector, holding a 61.4 percent weight, essentially dictates the trajectory of the overall IPI,” GASTAT highlighted in their report.
The report further detailed that the mining and quarrying sub-index fell by 14.2 percent in March from the same period last year, as the nation curtailed its oil production to 8.9 million barrels per day.
March also saw a 0.4 percent decrease in mining activities relative to February, largely due to Saudi Arabia’s strategic reduction of oil output in accordance with OPEC+ agreements. This move, aimed at preserving market equilibrium, has led to a 500,000 barrel per day cut in April 2023, which is expected to persist until December 2024.
On a brighter note, the production of paper and paper products charted an 8.2 percent annual growth, and beverage production leaped by 6.5 percent.
Further economic insights from GASTAT indicated a 1.3 percent increase in Saudi Arabia’s real gross domestic product (GDP) during the first quarter of the year compared to the last quarter. This uptick was spurred by advances in both oil and non-oil sectors, ascending by 2.4 percent and 0.5 percent respectively.