Saudi Arabia’s Manufacturing Activities Experience Mixed Results in March
In March, Saudi Arabia saw a surge in the production of paper and related products, leading to a 0.2 percent increase in manufacturing activities compared to the previous month. However, despite a 1.2 percent rise in the paper sub-sector, the overall Industrial Production Index (IPI) of the Kingdom still posted a marginal slip of 0.2 percent.
Declines in Chemicals and Basic Metals Production Offset by Increase in Paper Manufacturing
The General Authority for Statistics reported declines of 2.6 percent in the manufacturing of chemicals and chemical products, and 0.6 percent in the production of basic metals. On the other hand, the production of paper and paper products recorded an annual increase of 8.2 percent, balancing out the drops in other areas.
Impact of Mining and Quarrying Activities on Overall IPI
The overall IPI in Saudi Arabia experienced a decline of 8.7 percent in March compared to the same month in 2022. This decrease was primarily attributed to a downturn in mining and quarrying activities, which decreased by 14.2 percent compared to the previous year.
Oil Production Cuts Drive Mining Activity Decline
Saudi Arabia’s decision to reduce oil output, in line with an agreement by OPEC+ countries, led to a decline in mining activities. The country decreased its oil production to 8.9 million barrels per day in March 2024, impacting the overall IPI.
Positive Growth in Beverages Production and Real GDP
Despite the challenges in the mining sector, the production of beverages surged by 6.5 percent in March. Additionally, Saudi Arabia’s real gross domestic product increased by 1.3 percent in the first three months of the year, driven by growth in both oil and non-oil activities.