The Industrial Production Index in the Kingdom of Saudi Arabia saw a notable increase of 8.9% during February 2026 compared to the same month of the previous year, reflecting strong growth in the mining and quarrying sectors, manufacturing, as well as water supply and waste management activities. However, data released by the General Authority for Statistics (GASTAT) indicated a slight month-on-month decline of 0.2%.
Data details show that the mining and quarrying index achieved an annual increase of 13%, attributed to the rise in the Kingdom's oil production to 10.1 million barrels per day, compared to 8.9 million barrels per day in February 2025. The sub-index for the mining and quarrying sector also recorded a monthly increase of 0.1%.
Manufacturing Sector Performance
Furthermore, the manufacturing index rose by 3.6% year-on-year, supported by a 5.2% increase in the production of coke and refined petroleum products, and 4.5% in chemical production. However, preliminary results indicate a decline of 0.2% in manufacturing activity month-on-month, due to a 0.8% decrease in the production of coke and refined petroleum products, and 1.4% in chemical production.
The index for electricity, gas, steam, and air conditioning supply activities experienced a decline of 3.7%, while the index for water supply and waste management activities rose by 8.1% compared to February 2025. When comparing the indices to January 2026, the index for electricity, gas, steam, and air conditioning supply activities fell by 3.9%, while the index for water supply and waste management activities decreased by 4.1%.
Background & Context
The increase in the Industrial Production Index is significant as it reflects the ongoing efforts of the Saudi government to diversify its economy away from oil dependency. The growth in the mining and manufacturing sectors is particularly noteworthy, as these areas are crucial for the Kingdom's Vision 2030 objectives, which aim to enhance economic sustainability and resilience.
Moreover, the rise in oil production to 10.1 million barrels per day highlights the Kingdom's capacity to meet both domestic and international demand, reinforcing its position as a leading oil producer. The data also suggests that the non-oil sectors are becoming increasingly vital in supporting the overall economy.
Impact & Consequences
The implications of this growth in the Industrial Production Index are manifold. It indicates a strengthening of the Saudi economy, showcasing its ability to withstand global economic fluctuations. The robust performance in the mining and manufacturing sectors not only contributes to GDP growth but also creates job opportunities and stimulates investment.
Additionally, the slight month-on-month decline in certain sectors may warrant attention from policymakers, as it could signal potential challenges ahead. Continuous monitoring and strategic interventions will be essential to sustain the positive momentum observed in the industrial sector.
Regional Significance
Regionally, the increase in industrial production positions Saudi Arabia as a key player in the Gulf Cooperation Council (GCC) and beyond. The Kingdom's efforts to diversify its economy can serve as a model for other nations in the region that are also seeking to reduce their reliance on oil revenues.
In conclusion, the latest figures from the Industrial Production Index are a testament to the resilience and adaptability of the Saudi economy, reflecting the success of economic diversification strategies and the importance of non-oil sectors in driving growth.