Saudi Arabia’s Industrial Production Index (IPI) went up by 0.8% in September, driven mainly by a small rise in mining and quarrying activities, as per official data. The mining and quarrying sector saw a 0.6% increase in September, contributing to the overall growth. Additionally, the manufacturing sector and electricity and gas supplies industries each saw a 1% increase during the same period.
However, the report also highlighted that the Kingdom’s IPI dropped by 11% in September compared to the same month last year. This decline was attributed to the decrease in mining and quarrying activity, which holds significant weight in the index.
The General Authority for Statistics (GASTAT) stated that the decline in mining and quarrying activities was due to an 18.7% decrease in September, aligned with the Kingdom’s decision to reduce oil output in line with the Organization of the Petroleum Exporting Countries (OPEC) decision.
GASTAT further explained that the relative weights of the mining and quarrying, manufacturing, and electricity and gas supply sectors in the IPI are 74.5%, 22.6%, and 2.9% respectively, with the mining and quarrying sector dominating the trend in the general IPI.
In April, Saudi Arabia made the decision to cut oil output by 500,000 barrels per day to maintain market stability, and this has been extended until the end of December 2024. Additionally, in July, the Kingdom pledged an extra oil output cut of 1 million barrels per day, which has now been extended until the end of December.
The Ministry of Energy announced that this additional cut is a part of the precautionary efforts made by OPEC+ countries to support oil market stability.
The GASTAT report also revealed that manufacturing activity in Saudi Arabia increased by 6.7% in September 2023 compared to the same month last year, while electricity and gas supplies surged by 26.5% during the same period.