The General Authority for Statistics in the Kingdom of Saudi Arabia announced new economic data reflecting the movement of industrial markets, as the producer price index recorded an increase of 1% during December 2025, compared to the same month of the previous year, 2024. This data provides a clear indication of production costs and price movements in the main industrial and service sectors in the Kingdom.
Index details and sectoral performance
According to the report, the overall Producer Price Index rose to 103.5 points in December 2025 (base year 2023), compared to 102.4 points in December 2024. This increase is mainly attributed to price movements in the manufacturing sector, which is one of the main pillars of the index, as it recorded an annual increase of 0.9%.
This rise in manufacturing was driven by a 1.8% increase in refined petroleum product prices, in addition to a 3.5% rise in fabricated metal product prices. Meanwhile, the energy supply sector (electricity, gas, steam, and air conditioning) saw a 1.5% increase, reflecting minor changes in energy input costs.
Despite the significant jump recorded by the prices of water supply, sanitation and waste management activities by 11.5%, its impact on the overall index remained limited due to its low relative weight of only 1.1% of the total index basket.
The importance of the Producer Price Index (PPI)
The Producer Price Index (PPI) is one of the most important economic indicators monitored by countries to measure the average price changes received by domestic producers for their goods and services. Its significance lies in its role as a leading indicator of inflation; any increase in production costs or wholesale prices often has a subsequent impact on consumer prices (CPI).
This indicator helps policymakers and economic analysts understand inflationary pressures in their early stages and determine whether they are caused by supply factors (such as rising raw material costs) or demand factors. It is also used to adjust long-term commercial contracts and analyze the competitiveness of domestic products in global markets.
The economic and industrial context in the Kingdom
This slight increase in producer prices aligns with the economic momentum underway in Saudi Arabia as part of Vision 2030, which aims to diversify the economic base and strengthen the role of local industry. The stability or slight increase in prices of refined petroleum products and metals indicates continued demand and activity in these vital sectors.
The Kingdom is continuously developing its industrial infrastructure, making monitoring production costs crucial to ensuring sustainable growth and investment attractiveness. This data indicates relative stability in production inputs, which supports the business environment and encourages expansion across various industrial sectors.
