Saudi Arabia's Industrial Production Index (IPI) fell 23.5% year-over-year in August 2026, sliding to 87.1 points from 113.9 points in the same month a year prior, the General Authority for Statistics (GASTAT) announced. The IPI measures the relative change in production quantities of materials and goods as they are transformed from raw materials into final consumable products for economic returns.

The General Authority for Statistics attributed the decline to lower output in two key sectors: mining and quarrying, and manufacturing activities. The mining and quarrying sub-index experienced the steepest contraction, falling 35.8% year-over-year in August. This sector has historically been central to Saudi Arabia's economy and industrial output.

The manufacturing sub-index declined 8.8% year-over-year, with significant weakness in specific product categories. The manufacture of coke and refined petroleum products dropped 24.1%, representing a substantial pullback in a sector traditionally vital to the kingdom's industrial base. The manufacture of chemicals and chemical products also contracted, declining 3.3% during the same period.

Not all industrial sectors contracted in August, however. The electricity, gas, steam and air conditioning sub-index rose 9.4% year-over-year, while the sub-index for water supply, sewerage, waste management and treatment activities grew 7.4%. These gains in utilities and environmental services provided a partial offset to weakness elsewhere in the industrial sector.

The breadth and magnitude of the August decline—particularly the 35.8% plunge in mining and quarrying—signals significant headwinds across Saudi Arabia's industrial economy. The data reflects production trends from August 2026 and represents the most recent official statistics available from GASTAT on industrial activity. Further drivers of the weakness and potential recovery timeline were not detailed in the available statement.