RIYADH: Manufacturing activity in Saudi Arabia increased by 10 percent in May compared to the same month of the previous year despite a slight fall in the Kingdom’s Industrial Production Index, official data showed.
According to the latest report released by the General Authority for Statistics, the Kingdom’s IPI in May 2023 decreased by 1.2 percent compared to April.
“Although the activity of the manufacturing industry and the activity of electricity and gas supply continued to rise, the decline in the mining and quarrying activity during May 2023 led to the decrease in the general index, given its high weight in the index,” said GASTAT in the report.
The relative weights of the mining and quarrying, manufacturing and electricity and gas supply sectors in the IPI are 74.5 percent, 22.6 percent and 2.9 percent, respectively. As a result, trends of IPI were heavily dependent on mining activities, it said.
The report added that mining activities in Saudi Arabia decreased by 5.5 percent in May as the Kingdom reduced its oil production to 9.9 million barrels per day.
“At a declining rate of 1.2 percent in the month of May 2023, the IPI continued its downward movement of previous months, however, reaching negative territory for the first time,” GASTAT said in the report.
The report added: “The index had peaked in early 2022, supported by growth rates of mining and quarrying activities, and manufacturing activities during that year. Since then, and in particular in 2023, growth rates have slowed down, mainly driven by mining and quarrying.”
The report further noted that electricity and gas supplies also increased by 12 percent year on year in May.
Compared to April 2023, overall IPI decreased by 3.1 percent driven by mining and quarrying sector which reduced by 4.8 percent.
Earlier this month, the Riyad Bank Saudi Arabia Purchasing Managers’ Index report, compiled by S&P Global, had suggested that non-oil business activities in the Kingdom witnessed a massive expansion in June driven by growth in construction and tourism sectors.
According to the report, the Kingdom’s PMI surged to 59.6 in June from 58.5 in May, and remained fractionally lower than the eight-year peak in February when the figure touched 59.8.
