CEIC Data Blog

Saudi Arabia’s Manufacturing Industry Is Booming


CEIC News@lert: Saudi Arabia has always been regarded as an economy relying solely on crude oil exports. A closer look at its activities proves that this is absolutely not the case. Saudi Arabia has been enjoying an obvious boom in its manufacturing sector in the last decade though refined petroleum is still enjoying its strategic importance.

Accordingly, it is reasonable to see energy consumption increasing especially by the oil industry. The level of investment in the kingdom in general has been intensified and so was the gross fixed capital formation in machinery and equipment needed for manufacturing.

Intensified Real Investments in Machinery Needed for Manufacturing,
Accompanied by High Energy Consumption
Saudi investments
Chart provided by: CEIC

The overall number of factories reached 4765 in 2010 compared to 2113 in 1990 indicating a jump of 125.5% during the last 2 decades. Diversification plans have shown great success to increase other manufactured products versus oil refining.

Manufactured exports witnessed a booming trend indicating the kingdom’s success in developing national industry. In fact, Saudi Basic Industries Corporation (SABIC) is now one of the world’s leading manufacturers of chemicals, fertilizers, plastics and metals. The rising trend of imported machinery supports the increasing manufactured output.

Manufacturing Industry More Towards Non Oil ActivitiesSaudi Industry
Chart provided by: CEIC

Government efforts to promote the national industry included building infrastructure, establishing the Saudi Industrial Development Fund (SIDF), developing industrial cities in various regions within the kingdom and providing other industrial support and incentives. The most important industrial cities are Jubail and Yanbu which operate with high efficiency benefiting from cheap energy and raw materials. They are now strategic locations for hydrocarbon and energy intensive industries. To supervise the management and development of industrial cities and promote collaboration with the private sector, the Saudi Industrial Property Authority has been established in 2001.
Beside the high portion of commercial bank loans serving the manufacturing and processing industries, the SIDF established by the government to support industrial projects have been playing an increasingly important role.

An Increase in Manufactured Exports Supported by Importing New MachinerySaudi Exports
Chart provided by: CEIC

The Ministry of Economy and Planning aims to further intensify industrial development as per its ninth development plan. More progress is planned towards a knowledge-based economy by developing a competitive advantage for Saudi industry; enhancing local, regional and international linkages; and encouraging advanced high value-added industries. At the same time, the Ministry is trying hard to ensure economic diversification, balanced development and employment.

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