Investments in Saudi Arabia’s industrial sector have skyrocketed to SR1.5 trillion ($400 billion) in 2023, marking a 54% increase since 2019, when the Kingdom waived expatriate worker fees for the industrial sector. This impressive growth is detailed in a new report released by the Federation of Saudi Chambers’ economic-affairs department.
The report highlights the substantial impact of the fee waiver initiative, which was launched in 2019 and is set to run until 2025. It emphasizes key industrial milestones achieved over the last five years, spanning gross domestic product (GDP) contributions, the rise in industrial establishments, foreign investment, and job creation.
According to the report, the industrial sector’s contribution to GDP surged to 14.7% in 2023, equivalent to SR592 billion ($158 billion), compared to SR392 billion ($104 billion) in 2019. This was accompanied by a 55.6% increase in the number of industrial establishments, rising from 7,625 in 2019 to 11,868 in 2024.
Foreign investments have also seen significant growth, spurred by both the fee waiver and supportive government policies.
The number of foreign-owned factories increased by 71.5%, reaching 1,067 this year, while foreign capital investment soared by 116.2%, hitting SR93 billion ($24.8 billion), up from SR43 billion ($11.4 billion) in 2019.
The report also noted an increase in the industrial workforce, which now totals 1.2 million workers, including 358,000 Saudis. Localization in the sector reached 28%, with Saudis making up 12.9% of the private sector’s total workforce. The report highlights the role of government incentives in driving job creation, with the industrial sector creating over 82,000 jobs for Saudis from January 2023 to March 2024.
The sector’s contribution to non-oil exports grew by 12%, reaching SR208 billion ($55 billion) in 2023, up from SR187 billion ($50 billion) in 2019. This growth was driven by market expansion and the signing of numerous trade agreements, helping boost demand for Saudi-made products.
The fee waiver has also enhanced the quality of national products, with many establishments adopting modern technologies and innovations. The increased quality, alongside the Saudi Quality Mark certification, has bolstered both local and international demand for Saudi products.
The initiative has benefited more than 8,000 establishments at a total cost of SR5 billion ($1.3 billion), according to the report.
