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Saudi Industry, Construction Sectors Conclude Contracts Worth at Least $2b

The Saudi industrial sector is witnessing an increase in the number of licenses and investments (Asharq Al-Awsat)
The Saudi industrial sector is witnessing an increase in the number of licenses and investments (Asharq Al-Awsat)
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Saudi Industry, Construction Sectors Conclude Contracts Worth at Least $2b

The Saudi industrial sector is witnessing an increase in the number of licenses and investments (Asharq Al-Awsat)
The Saudi industrial sector is witnessing an increase in the number of licenses and investments (Asharq Al-Awsat)

Saudi Arabia's industrial and construction sectors are concluding agreements and contracts worth over $2 billion, according to the Ministry of Industry and Mineral Resources.

A report issued by the Ministry's National Center for Industrial and Mining Information indicated that the ministry issued 531 industrial licenses from the beginning of this year until July.

The number of existing and under-construction factories in Saudi Arabia reached 10.6 thousand, with an investment volume of about $363 billion.

The report indicated that investments following the new licenses in July amounted to $258.9 million, while small enterprises acquired most of the new industrial permits during the same month by 86.6 percent, followed by medium enterprises by 13.3 percent.

Local factories recorded the most significant proportion of the total licenses issued by a type of investment, accounting for 73.3 percent, followed by foreign enterprises at 20 percent and joint-investment enterprises at 6.6 percent.

Also, 22 factories began production in July, with investments amounting to $145.7 million, topped by the food industry with nine factories, followed by paper and nonferrous metal factories with four each.

The report revealed that the new industrial licenses were distributed among five administrative regions, topped by the Riyadh region with 15 licenses, followed by the Eastern region with seven licenses, then Makkah with six licenses, while al-Qassim and Madinah registered one license for each.

The Ministry of Industry and Mineral Resources issues, through the National Center for Industrial Information, a monthly bulletin with essential industrial indicators that clarify the nature of the movement of industrial activity in the Kingdom.

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Saudi Arabia Sees Highest Level of Non-oil Private Sector Activity in 4 Months

The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)
The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)
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Saudi Arabia Sees Highest Level of Non-oil Private Sector Activity in 4 Months

The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)
The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)

Business activity in Saudi Arabia's non-oil sector accelerated to a four-month high in September, driven by strong demand, which led to faster growth in new orders. The Riyad Bank Saudi Arabia Purchasing Managers' Index (PMI), adjusted for seasonal factors, rose to 56.3 points from 54.8 in August, marking the highest reading since May and further distancing itself from the 50.0 level that indicates growth.

The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders, alongside challenges in supply. The improvement in business conditions contributed to a significant rise in employment opportunities, although difficulties in finding skilled workers led to a shortage in production capacity.

At the same time, concerns over increasing competition caused a decline in future output expectations. According to the PMI statement, inventories of production inputs remained in good condition, which encouraged some companies to reduce their purchasing efforts.

Growth was strong overall and widespread across all non-oil sectors under study. Dr. Naif Al-Ghaith, Senior Economist at Riyad Bank, said that the rise in Saudi Arabia's PMI points to a notable acceleration in the growth of the non-oil private sector, primarily driven by increased production and new orders, reflecting the sector’s expansionary activity.

Al-Ghaith added that companies responded to the rise in domestic demand, which plays a crucial role in reducing the Kingdom's reliance on oil revenues. The upward trend also indicates improved business confidence, pointing to a healthy environment for increased investment, job creation, and overall economic stability.

He emphasized that this growth in the non-oil sector is particularly important given the current context of reduced oil production and falling global oil prices. With oil revenues under pressure, the strong performance of the non-oil private sector acts as a buffer, helping mitigate the potential impact on the country's economic conditions.

Al-Ghaith continued, noting that diversifying income sources is essential to maintaining growth amid the volatility of oil markets. He explained that increased production levels not only enhance the competitiveness of Saudi companies but also encourage developments aimed at expanding the private sector's participation in the economy.

This shift, he said, provides a more stable foundation for long-term growth, making the economy less susceptible to oil price fluctuations.