Saudi Industrial Output Rebounds 3.2% in May Despite Annual Decline
Saudi Arabia's industrial sector recorded a 3.2% month-on-month increase in May, signaling a recovery in production after recent weakness, although overall output remained below the level recorded a year earlier.
The rebound was driven by stronger activity across key industrial segments, including manufacturing, which benefited from improved domestic demand and higher production in several non-oil industries. The monthly increase also reflects the Kingdom's ongoing efforts to diversify its economy under Vision 2030 by expanding industrial capacity and reducing reliance on oil revenues.
Despite the monthly improvement, industrial output continued to post a year-on-year decline, largely due to lower crude oil production resulting from OPEC+ voluntary output cuts and softer activity in the mining and quarrying sector, which remains a major contributor to the Industrial Production Index.
Economists note that the recovery in manufacturing and non-oil industries is encouraging, but the overall pace of industrial growth will continue to depend on global energy demand, oil production policy, and the strength of private-sector investment. They expect the non-oil industrial sector to remain a key driver of Saudi Arabia's economic expansion in the coming months, even as the energy sector faces continued production constraints.