Saudi IPI at 3-Year High on Back of Oil, Manufacturing Output

Saudi Arabia's Industrial Production Index, also known as IPI, grew by 24.8% in March 2022 compared to the same month of last year.

This was again the highest year-on-year growth rate during the last three years, according to General Authority for Statistics, also known as GASTAT.

IPI’s positive growth is attributed to higher production in its two main sub-sectors - mining and quarrying and manufacturing.

As the dominant sector in the index, mining and quarrying took 74.5% of the weight, manufacturing and electricity and gas supply sectors in the IPI are, 22.6% and 2.9%, respectively.

Having the highest weight, mining and quarrying and the manufacturing are therefore the main drivers of this growth.

In March 2022, mining and quarrying grew by 26.6% compared to the same month a year earlier, as Saudi Arabia increased its oil production to its highest level by over 10 million barrels per day in March 2022.

Its share contribution to overall growth in the general IPI even increased by 0.8 percentage points compared to February - from 19.0 to 19.8 percentage points.

Production in manufacturing and electricity and gas sectors also grew by 22% and 1.4% year-on-year respectively.

The share of manufacturing in overall growth increased even more than that of mining - by 1.7 percentage points compared to February - from 3.2 percentage points to almost 5.0 points in March.

Compared to the previous month, the overall IPI increased by 2%, according to GASTAT, with mining and quarrying showing month-on-month growth of 0.7%, manufacturing sector by 6%, while electricity and gas supplies decreased by 1.3% compared to the previous month.