What's happened
General Authority for Statistics shows April IPI at 84.9, down from March and a year earlier. Mining and quarrying lead the decline, while oil-related activity remains weak. Some manufacturing segments rise, notably basic metals and paper products, as the sector battles a volatile energy backdrop tied to regional tensions.
What's behind the headline?
Analysis
- The data shows a broad pullback in mining and manufacturing, with mining down 9.3% MoM and manufacturing down 4.8% MoM, indicating a contraction in key upstream activity.
- Oil-related manufacturing is hit hardest, with an 8.7% MoM drop, leaving non-oil activity down 3.2% YoY, underscoring energy-market dependence in the Kingdom’s industrial mix.
- On the upside, basic metals, non-metallic minerals and paper products register YoY gains, suggesting selective recovery in non-oil segments as diversification efforts show some traction.
- Electricity and utilities activity is the bright spot, rising 20.8% YoY, which could help power more manufacturing in the quarters ahead.
- Investors should watch for policy signals and international price dynamics as global energy markets continue to influence domestic output.
Forecast: If energy prices stabilise and refinery runs improve, manufacturing in the Kingdom may stabilise in the second half of 2026, with non-oil sectors leading the rebound.
How we got here
GASTAT’s latest IPI release covers mining, manufacturing, electricity and related services. April figures reflect weakness driven by lower oil and gas activity and a challenging geopolitical environment in the Middle East, with notable year-on-year declines in mining, chemicals and coke product manufacturing. Yet certain segments show resilience, signaling a mixed recovery path for Saudi industry.
Our analysis
Arab News; GASTAT release on April IPI; accompanying data breakdown shows sector-specific movements, including declines in coke/refined petroleum products and chemicals, offset by gains in metals and paper products. The article notes electricity up while oil activity falls. Analysts cited by the report describe a mixed but gradually improving industrial landscape.
Go deeper
- Will Saudi industrial output regain momentum in the next quarter?
- Which segments are most likely to drive a rebound in non-oil manufacturing?
- How will energy-market volatility affect Saudi policy on industrial diversification?