Saudi Arabia Industrial Production Falls 23.5% as Mining Output Contracts

Saudi Arabia’s industrial production fell 23.5 per cent year on year in August, driven by a sharp contraction in mining and quarrying, while non-oil industrial activities recorded modest growth, according to official data.

Preliminary figures released by the General Authority for Statistics (GASTAT) showed the kingdom’s Industrial Production Index (IPI) declined to 87.1 in August, compared with 101.3 in July and 113.9 in August 2025.

Mining and quarrying activity recorded an annual decline of 35.8 per cent, accounting for much of the overall fall. The figures came as the US-Iran conflict disrupted oil production and shipping across the Middle East, with restrictions on important export routes affecting regional energy flows.

Manufacturing output also weakened, with the sector’s sub-index falling 8.8 per cent year on year. The decline was mainly linked to a 24.1 per cent drop in the manufacture of coke and refined petroleum products.

However, some industrial segments recorded gains. Electricity, gas, steam and air-conditioning supply increased by 9.4 per cent compared with August last year, while water supply, sewerage, waste management and remediation activities rose by 7.4 per cent, GASTAT said.

Monthly output records further decline

On a monthly basis, Saudi Arabia’s industrial production index fell 14 per cent in August, reflecting a substantial reduction in mining and quarrying output.

Mining and quarrying activity declined by 24 per cent compared with July, while manufacturing output fell 3.2 per cent.

Within manufacturing, the production of coke and refined petroleum products dropped 11.1 per cent month on month. The manufacture of chemicals and chemical products recorded a smaller decline of 0.1 per cent.

In contrast, the electricity, gas, steam and air-conditioning supply index increased by 7 per cent from July. Water supply, sewerage, waste management and remediation activities recorded a monthly rise of 0.2 per cent.

GASTAT’s figures also highlighted the difference between oil and non-oil industrial activity. The index for oil-related activities fell 33.6 per cent year on year in August and declined 21.5 per cent from July.

The non-oil activities index, meanwhile, increased by 1.2 per cent annually and 1.4 per cent month on month, indicating continued expansion in parts of the economy outside the oil sector.

The contrasting performance shows how heavily the overall industrial index is affected by changes in mining and oil production, even when some non-oil industries continue to grow.

Industrial output indicator

The Industrial Production Index measures changes in the volume of industrial output using the International Standard Industrial Classification framework.

Its coverage includes mining and quarrying, manufacturing, electricity, gas, steam and air-conditioning supply, as well as water supply, sewerage, waste management and remediation activities.

The August figures underline the pressure on Saudi Arabia’s industrial sector from weaker oil-related activity, while gains in selected non-oil industries and utilities provided some sup