Saudi Arabia industrial output rises 5.1 percent as diversification advances

Saudi Arabia’s industrial sector ended 2025 with a 5.1 percent increase, a sign that the Kingdom’s production base kept expanding even as policymakers pressed harder for diversification. The Industrial Production Index reached 110.4 points, up from 105.1 in 2024 and 107.5 in 2023, suggesting the recovery was broad enough to look durable rather than like a one-off jump.

The harder question is how much of that growth reflects a genuinely wider industrial economy and how much still rests on hydrocarbons and extraction. General Authority for Statistics data show mining and quarrying rose 5.8 percent in 2025, ahead of manufacturing’s 3.9 percent gain. Within manufacturing, output of coke and refined petroleum products rose 3.7 percent, chemicals and chemical products climbed 9.3 percent, and food products manufacturing increased 2.9 percent, underscoring how much of the industrial mix still sits close to energy and basic processing.

Utilities also added momentum. Electricity, gas, steam and air-conditioning supply increased 5.2 percent, while water supply, sewerage, waste management and remediation activities jumped 10 percent. GASTAT said oil activities rose 5.4 percent in 2025 and non-oil activities rose 4.3 percent, a split that shows progress beyond crude without yet breaking the economy’s longstanding dependence on it.

The 2025 data matter because they build on a mixed comparison base. In 2024, the annual Industrial Production Index fell 2.3 percent even as non-oil activities rose 5.3 percent and manufacturing grew 4.7 percent. This year’s rebound therefore looks less like a sudden policy win than a continuation of a longer effort to widen the industrial base under Saudi Vision 2030 and the National Industrial Development and Logistics Program, launched in 2019.

That broader shift is also visible in the wider economy. Saudi Arabia’s real GDP grew 3.0 percent year on year in the first quarter of 2026, with non-oil activities contributing 1.7 percentage points to growth compared with 0.8 percentage points from oil activities. GASTAT said it conducts the Industrial Production Survey monthly across Saudi regions and releases IPI results about 40 days after the reference period, making the index a key short-term read on whether diversification is truly taking hold. The latest numbers suggest the Kingdom is still moving in that direction, but the balance between extraction, energy-linked manufacturing and broader industrial expansion remains the central test.