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KSA Identifies 6 Ways to Support Industrial Sector Development

Photo of the meeting at the Riyadh Chamber of Commerce and Industry on Monday (Asharq Al-Awsat).
Photo of the meeting at the Riyadh Chamber of Commerce and Industry on Monday (Asharq Al-Awsat).
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KSA Identifies 6 Ways to Support Industrial Sector Development

Photo of the meeting at the Riyadh Chamber of Commerce and Industry on Monday (Asharq Al-Awsat).
Photo of the meeting at the Riyadh Chamber of Commerce and Industry on Monday (Asharq Al-Awsat).

The Riyadh Chamber of Commerce and Industry has identified six main ways to address in the industrial sector, mainly issues related to finance, exports, legislation and local content.

In remarks to Asharq Al-Awsat, the chairman of the Industrial Committee, Abdulaziz Al-Duailej, said that working groups were formed to set a road map and a work program, adding that a workshop was held on Monday to discuss means to develop the industrial sector in a number of targeted fields.

He noted that attention was focused on addressing financing and exports issues, including financial support for factories facing economic difficulties, in addition to activating programs provided by governmental and semi-governmental funds and institutions and encouraging trade exchange with countries that have commercial relations with the Kingdom.

For his part, member of the Saudi Shura Council, Fadl Al-Buainain, told Asharq Al-Awsat that despite the coronavirus pandemic, the Ministry of Industry figures growth rate of factories increased by 9 percent during the period extending from Sept. 2019 till Sept. 2020.

The total volume of investments in the industrial sector jumped to one trillion riyals, an increase of 7 percent, which gives reason for optimism for the future growth in 2021, according to Buainain.

He noted in this regard that the Ministry of Industry’s strategy focuses on localization, enhancing local content and creating more jobs.

The industrial sector today needs a national strategy for the manufacturing industries, which is the most important element to diversify the sector and increase its size, he emphasized.

Monday’s workshop, which was organized by the Riyadh Chamber, reviewed strategic matters for the industrial sector, mainly the productivity program, the establishment of the National Center for Industrial Information and other objectives that fall within the goals of Saudi Vision 2030.

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Saudi Arabia’s Private Sector Ends 2024 with Strongest Sales Growth

 The Saudi capital, Riyadh (AFP)
 The Saudi capital, Riyadh (AFP)
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Saudi Arabia’s Private Sector Ends 2024 with Strongest Sales Growth

 The Saudi capital, Riyadh (AFP)
 The Saudi capital, Riyadh (AFP)

Saudi Arabia’s non-oil private sector concluded 2024 on a high note, with significant increases in sales and business activity fueled by robust domestic and international demand.
The Kingdom’s non-oil GDP is expected to grow by over 4% in both 2024 and 2025, supported by notable improvements in business conditions, according to Riyad Bank’s Purchasing Managers’ Index (PMI) report.
Despite inflationary challenges, the Riyad Bank PMI recorded 58.4 points in December, reflecting strong and accelerated economic recovery, albeit slightly lower than November’s 59.0 points.
The solid performance highlights improvements across non-oil sectors, with new business activity in December growing at its fastest pace in 12 months. This growth reflects rising domestic and global demand. Renewed marketing efforts and strong customer demand encouraged companies to boost production and expand operations, particularly in wholesale and retail.
The PMI has remained above the neutral threshold of 50.0 points since September 2020, signaling continuous expansion in Saudi Arabia’s non-oil economic activity.
The International Monetary Fund (IMF) previously projected sustained momentum in Saudi Arabia’s non-oil reforms, estimating non-oil GDP growth for 2024 at between 3.9% and 4.4%. The IMF noted that growth could reach 8% if reform strategies are fully implemented.
Expansion in International Markets
A surge in exports was among the key factors driving non-oil economic growth in Saudi Arabia. December saw the largest increase in export orders in 17 months, underscoring the success of Saudi policies in opening new markets and fostering strong international trade relationships, supported by ongoing product innovation.
Higher domestic and international demand boosted production levels in December. Companies also worked to enhance operational efficiency, leading to a notable increase in inventory. Purchasing activity accelerated to its highest level in nine months, reflecting the sector’s ability to effectively meet rising demand.
Cost Pressures on Production
Despite significant growth in production and sales, the sector continues to face challenges related to sharp inflation in input costs, driven by heightened demand for raw materials. These pressures have led to higher product prices, although some companies opted to reduce prices to remain competitive and address elevated inventory levels.
Meanwhile, wage cost increases were less pronounced, helping mitigate economic pressures related to salaries.
Future Outlook
Dr. Naif Al-Ghaith, Chief Economist at Riyad Bank, highlighted the positive end to 2024 for the Kingdom’s non-oil private sector, reflecting the progress achieved under Saudi Arabia’s Vision 2030. He noted that the PMI score of 58.4 points demonstrates the sector’s resilience and ongoing expansion.
Al-Ghaith expects non-oil GDP to grow by over 4% in 2024 and 2025, driven by improved business conditions and rising new orders, signaling increased market confidence and demand. Elevated domestic demand and export growth have pushed total sales to their highest level in a year. This, in turn, has led to strong increases in business activity and inventory levels, demonstrating the sector’s ability to meet and capitalize on excess demand, he underlined.