Saudi Arabia registered a sharp industrial rebound in September, led by a recovery in mining and quarrying operations. Preliminary figures from the General Authority for Statistics showed the Industrial Production Index climbed 15.6 percent from August, reaching 101.3 points compared with 87.7 points the previous month. Despite the monthly gain, overall output was 10.9 percent lower than the same period a year earlier.
Mining and quarrying activity surged by 29.9 percent on a monthly basis, while manufacturing output expanded by 2.8 percent. The monthly rebound followed disruptions to regional energy markets caused by the military conflict involving the United States, Israel, and Iran in February.
To maintain petroleum exports, Saudi Arabia used alternative transport routes such as the East-West pipeline to the Red Sea port of Yanbu. Vijay Valecha, chief investment officer at Century Financial, said that crude oil and gas extraction dominates the index.
Output increased as the Kingdom expanded ship-to-ship transfers beyond the Strait of Hormuz. Manufacturing also advanced, supported by Vision 2030 initiatives to diversify the economy away from oil.
GASTAT reported that monthly manufacturing growth stemmed from a 7 percent increase in coke and refined petroleum products, along with a 0.8 percent rise in chemicals and chemical products. Meanwhile, the electricity, gas, steam, and air conditioning supply sub-index fell 1.2 percent from August, and the water supply, sewerage, and waste management sub-index declined 0.4 percent.
Valecha said that manufacturing growth was bolstered by the localization of products like pipes, cables, energy equipment, and building materials to reduce import dependency. Ready-built factory spaces and established infrastructure within industrial clusters are also assisting small and medium-sized enterprises.
Key industrial hubs supporting domestic supply chains include the King Salman Energy Park, King Abdullah Economic City, and sites developed by Modon. Facilities like the National Housing Co. Industrial City and Logistics Zone help storage and distribution.
On an annual basis, the September decline was driven by a 16 percent drop in mining and quarrying and a 5.4 percent fall in manufacturing. Production of coke and refined petroleum products dropped 13.6 percent year on year, while chemicals and chemical products decreased 3.8 percent.
Conversely, the electricity, gas, steam, and air conditioning supply sub-index rose 6.4 percent annually, and water supply and waste management increased 7.3 percent. Oil activities decreased 15.5 percent from a year earlier, while non-oil activities edged up 0.1 percent.
On a monthly comparison, oil activities jumped 24.7 percent, while non-oil activities increased by 0.6 percent.
