Saudi Arabia's Industrial Production Surges to Highest Level Since Late 2022

Saudi Arabia's industrial production rose 7.9% YoY in Q2, driven by manufacturing and oil output growth. The kingdom's GDP increased 4% YoY, with the non-oil sector and oil activities showing steady growth. Saudi Arabia heavily relies on oil prices to sustain economic momentum, with a fiscal breakeven oil price of $96 a barrel.

Saudi Arabia's industrial production surged by 7.9% year-on-year (YoY) in Q2 2025, marking a significant acceleration in manufacturing and oil output growth. This robust performance is reflected in the Kingdom's gross domestic product (GDP), which grew by 4% YoY, driven by steady growth in both the non-oil sector and oil activities. The surge in industrial production and GDP growth underscores Saudi Arabia's economic resilience and commitment to diversification under Vision 2030.

The General Authority for Statistics (GASTAT) reported that the Saudi Industrial Production Index (SIP) rose by 7.9% in June 2025 compared to the same month the previous year. The mining and quarrying sub-index increased by 6%, while the manufacturing sub-index climbed by 11.1%. Additionally, the water supply, sewerage, waste management, and remediation activities sub-index recorded an increase of 6.9%, and electricity, gas, steam, and air conditioning supply grew by 5.6% [1].

The growth in industrial production was primarily driven by an 11.1% rise in manufacturing output, supported by strong gains in chemicals and chemical products (18.7%) and coke and refined petroleum products (15.3%). Mining and quarrying activity grew by 6.0%, as the country’s oil production rose to 9.36 million barrels per day, up from 8.83 million barrels in June 2024 [2].

Saudi Arabia's GDP grew by 3.9% in Q2 2025, with the non-oil sector and oil activities showing steady growth. The non-oil sector, which accounts for 49.7% of total government income, grew by 6.6% in the second quarter compared to the same period of the previous year. This growth was driven by robust activity in non-hydrocarbon sectors, including wholesale and retail trade, restaurants and hotel sector, transport and communications, and finance and business services [3].

The Kingdom's fiscal breakeven oil price is $96 per barrel, highlighting the importance of oil prices in sustaining economic momentum. The gradual restoration of oil production, as part of the OPEC+ agreements, is expected to further solidify Saudi Arabia's economic trajectory in the second half of 2025.

References:
[1] https://english.aawsat.com/business/5173761-gastat-saudi-industrial-production-index-rises-79-june-2025
[2] https://tradingeconomics.com/saudi-arabia/industrial-production
[3] https://www.arabnews.com/node/2611109/business-economy