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Saudi Arabia: Factory Investments Exceed $382 Billion, Up 6.5%

One of the facilities of the industrial city in Asir, southern Saudi Arabia (Asharq Al-Awsat)
One of the facilities of the industrial city in Asir, southern Saudi Arabia (Asharq Al-Awsat)
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Saudi Arabia: Factory Investments Exceed $382 Billion, Up 6.5%

One of the facilities of the industrial city in Asir, southern Saudi Arabia (Asharq Al-Awsat)
One of the facilities of the industrial city in Asir, southern Saudi Arabia (Asharq Al-Awsat)

Factory investments in Saudi Arabia touched 1.433 trillion riyals ($382.1 billion) during the first quarter of 2023, an increase of 6.5 percent compared to the same period last year.

According to the statistical bulletin of industrial licenses issued by the Saudi Ministry of Industry and Mineral Resources, on Wednesday, the total number of industrial facilities hit 10,819 by the end of March — up from 10,518 factories at the end of 2022 — with the estimated capital of these factories amounting to over SAR 1.43 trillion ($381 billion).

Saudi factories were able to employ more than 725,000 workers during the first quarter of this year, compared to around 648,000 workers in the same period of 2022, with a growth rate of 11.8 percent.

The Eastern region led the size of investments in the factories with SAR 603 million ($161 billion) in the first quarter of 2023, an increase of 12.8 percent over the same period last year.

Riyadh came in the second place, with an investment volume that exceeded SAR 312.5 billion ($84.1 billion), up 2.7 percent from the first quarter of last year.

As for the number of industrial facilities according to administrative regions, Riyadh ranked first with more than 4,100 factories, followed by the eastern region with 2,400, then Makkah Al-Mukarramah with more than 2,000 factories.

According to the bulletin, national factories topped by type of investment with more than 83.5 percent, followed by foreign companies with 8.5 percent, then jointly invested factories with 8 percent.

Small establishments represented the largest percentage of industrial facilities until the end of the reported period, as they amounted to 5,600 factories, followed by medium factories with 4,300, then large enterprises, which accounted for 824 of the total number of factories.

Earlier this week, the Ministry of Industry and Mineral Resources announced it has begun evaluating the second tranche of facilities as part of its “Future Factories Program” to modernize the sector.

The initiative seeks to establish a strong technological ecosystem and transform the manufacturing sector based on modern practices and principles.

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Oil Prices Steady as Markets Weigh Demand against US Inventories

FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
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Oil Prices Steady as Markets Weigh Demand against US Inventories

FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)

Oil prices were little changed on Thursday as investors weighed firm winter fuel demand expectations against large US fuel inventories and macroeconomic concerns.

Brent crude futures were down 3 cents at $76.13 a barrel by 1003 GMT. US West Texas Intermediate crude futures dipped 10 cents to $73.22.

Both benchmarks fell more than 1% on Wednesday as a stronger dollar and a bigger than expected rise in US fuel stockpiles pressured prices.

"The oil market is still grappling with opposite forces - seasonal demand to support the bulls and macro data that supports a stronger US dollar in the medium term ... that can put a ceiling to prevent the bulls from advancing further," said OANDA senior market analyst Kelvin Wong.

JPMorgan analysts expect oil demand for January to expand by 1.4 million barrels per day (bpd) year on year to 101.4 million bpd, primarily driven by increased use of heating fuels in the Northern Hemisphere.

"Global oil demand is expected to remain strong throughout January, fuelled by colder than normal winter conditions that are boosting heating fuel consumption, as well as an earlier onset of travel activities in China for the Lunar New Year holidays," the analysts said.

The market structure in Brent futures is also indicating that traders are becoming more concerned about supply tightening at the same time demand is increasing.

The premium of the front-month Brent contract over the six-month contract reached its widest since August on Wednesday. A widening of this backwardation, when futures for prompt delivery are higher than for later delivery, typically indicates that supply is declining or demand is increasing.

Nevertheless, official Energy Information Administration (EIA) data showed rising gasoline and distillates stockpiles in the United States last week.

The dollar strengthened further on Thursday, underpinned by rising Treasury yields ahead of US President-elect Donald Trump's entrance into the White House on Jan. 20.

Looking ahead, WTI crude oil is expected to oscillate within a range of $67.55 to $77.95 into February as the market awaits more clarity on Trump's administration policies and fresh fiscal stimulus measures out of China, OANDA's Wong said.