Riyadh, Saudi Arabia — Saudi Arabia’s Industrial Production Index (IPI) fell for the third month in a row, declining by 9.8 percent year-on-year (YoY) in July.
Data issued by the General Authority for Statistics (GASTAT) showed that Saudi IPI retreated to 122.03 points in July, according to the base year 2010, compared to 135.23 points in the year-ago period.
The decline in IPI is the largest since April 2021, when it recorded a decline of 24 percent.
The manufacturing activity and the electricity and gas supply activity continued to rise. However, the decrease in the mining and quarrying activity in July contributed to the decline in the general index, due to its high weight in the index, GASTAT said.
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. Thus, the trend of the industrial production index in the mining and quarrying sector dominates the trend in the general IPI.
GASTAT said 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.
Compared to June 2023, overall IPI decreased by 6.5 percent due to the decrease in the mining and quarrying sector which decreased by 9.5 percent and manufacturing sector which decreased by 1 percent. Electricity & gas supplies increased by 11 percent, but due to the low weight of this activity, it did not have a significant impact on the index.
The IPI measures the relative change and reflects the production quantities of materials and goods, which have been converted from raw materials to consumables in their final form as goods, for the purpose of achieving a monetary return.
