Official data released by the General Authority for Statistics in Saudi Arabia shows strong growth in the Kingdom's industrial sector, with the industrial production volume index rising by 8.9% in December compared to the same month of the previous year. This positive growth reflects the sector's continued momentum and reinforces indicators of the success of the Kingdom's economic diversification strategies.
Background to growth: Vision 2030 and support for the industrial sector
This strong performance comes within the context of the comprehensive economic transformation underway in Saudi Arabia under the umbrella of Vision 2030. The Vision aims to reduce reliance on oil as the primary source of income and diversify the economic base. The National Industrial Development and Logistics Program (NIDLP) plays a pivotal role in achieving these goals, striving to transform the Kingdom into a leading industrial power and a global logistics hub. These programs aim to attract substantial investments, localize advanced technologies, and create high-quality job opportunities for Saudi citizens, as recent figures and statistics are beginning to demonstrate.
Details of growth drivers on an annual basis
According to data from the statistics authority, annual growth was mainly driven by positive performance in three key sectors:
- Mining and quarrying activity: This sector, which has a significant weight in the index, recorded a 13.2% year-on-year increase. This growth is largely attributed to increased crude oil production during December.
- Manufacturing activity: This sector achieved growth of 3.2%, supported by a notable increase in the activity of manufacturing chemicals and chemical products by 13.4%, and the activity of manufacturing food products, which grew by 7.3%.
- Water supply and sanitation activities: This sector witnessed strong growth of 9.4%, reflecting the development of infrastructure and related services.
In contrast, electricity and gas supply activity recorded a slight decrease of 2.5% year-on-year.
The importance of performance for non-oil sectors
These results are particularly significant when considering the performance of non-oil activities, whose index recorded annual growth of 5.8%. This figure is a vital indicator that economic diversification efforts are already bearing fruit, as the contribution of non-oil sectors to GDP increases. The growth of manufacturing and logistics not only strengthens the local economy but also enhances the Kingdom's competitiveness in regional and international markets, attracting foreign investment seeking opportunities in a dynamic and growing economy.
Monthly performance
Despite strong annual growth, the overall industrial production index showed a slight month-on-month decrease of 0.1% compared to the previous month of November. Electricity and gas supply activity saw a monthly decline of 13.1%, while mining and manufacturing activity remained stable with slight monthly growth of 0.3% each, demonstrating the resilience of these vital sectors.
