RIYADH: Saudi Arabia’s Industrial Production Index increased by 17.7 percent in July compared to the same period a year ago. The growth was primarily driven by high production in the three subsectors — mining and quarrying, manufacturing, and electricity and gas supplies, official data showed.
According to a report from the General Authority for Statistics, mining and quarrying grew by 14.1 percent in July from a year ago as Saudi Arabia increased its oil production to its highest level by more than 10 million barrels per day in July 2022.
The manufacturing activity increased by 32.6 percent compared to the same month of the previous year. The electricity and gas supplies increased by 5 percent, the report added.
IPI is an economic indicator that reflects the relative changes in the volume of industrial output, according to GASTAT.
Although IPI is still showing positive trends, its growth has slowed down for the third month in a row from a 26.7 year-on-year growth in April.
On a monthly basis, IPI saw a 1.6 percent increase propelled by mining and quarrying — its highest weighted component of 74.5 percent — which also grew by a modest 1.6 percent.
However, electricity and gas supplies surged 14.6 percent this month, but its small share made this insignificant in the index.
Overall, IPI has been characterized by growth which started in May 2021.
Prior to that, it was underperforming due to the two-year-long effects of the pandemic.
Looking at the past four months' performance, the deceleration in headline IPI was caused by slower growth in mining and quarrying — whose contribution halved over this period to 10.5 percentage points from 21.1 percentage points in April.
In contrast, the contribution of manufacturing grew by 1.7 percentage points to 7.4 percentage points in July from 5.7 in April as annual growth in the sector accelerated in July to 32.6 percent from 25.1 percent in April.
The slower growth in mining and quarrying has been caused by the decreasing rates of growth in volumes of crude output to 14.2 percent in July from 28.4 percent in April.