Saudi Arabia saw a significant 9.5% decline in its index of industrial production quantities during the month of July, when compared to the same month the previous year.
The primary driver behind this decline was the significant drop in mining and quarrying activity, which accounts for approximately 75% of the index's weight. In July, this sector experienced a substantial decrease of 16.7% compared to the same period in 2022. This drop was closely linked to Saudi Arabia's decision to reduce its oil production during that month.
Saudi Arabia's oil production policies hade a crucial effected in these figures. Extended its additional voluntary oil production cut of one million barrels per day for the second time, pushing it through until the end of September, with the potential for further extensions. This voluntary reduction was initially introduced in July and later extended until the end of August.
Despite the challenging conditions in the mining and quarrying sector, other areas of the economy showed resilience. Manufacturing activity, for instance, continued its upward trajectory with an impressive 8.7% growth. Additionally, electricity and gas supply activities surged by 21% in July compared to the same month the previous year. These sectors' performance underscores the diversified nature of Saudi Arabia's industrial landscape, offering a more balanced outlook for its economic future.