Oman manufacturing output advances 16.1% in first half

Oman's manufacturing sector experienced a robust 16.1% year-on-year increase in the first half of 2026, driven primarily by the booming chemical and refined petroleum industries. According to the National Centre for Statistics and Information, basic chemicals manufacturing surged 22.7% to RO659.6 million, while refined petroleum products expanded by an impressive 40% to RO397.2 million.

Other manufacturing sectors also grew by 6.3% to RO1.132 billion, suggesting that the overall industrial expansion went beyond these two key growth areas.

The surge in manufacturing output underscores the positive impact of stronger investment and rising overseas demand for Oman's manufactured goods and non-oil products. Foreign investment in the manufacturing sector rose 4.7% to approximately RO2.829 billion during the period, while overall trade data indicated that non-oil exports of national origin climbed by about 11%.

By the end of June, non-oil exports of national origin had reached around RO3.6 billion, marking a notable improvement from RO3.3 billion in the same period of 2025. Export growth notably accelerated in the second quarter, with shipments peaking around RO2 billion, up from approximately RO1.6 billion in the first three months.

The overall performance of Oman's merchandise exports was equally impressive, with total merchandise exports increasing by 15.3% to approximately RO13.2 billion in the first half of 2026. Re-exports also rose by 20%. The trade surplus widened by about 51% to RO4.7 billion, as export growth outpaced imports. Earlier data from NCSI for the first quarter revealed chemical industry exports rising 17% to RO216 million and base metals and related products increasing 10.8% to RO376 million.

Key non-oil product groups contributing to this growth include chemicals, base metals, plastics, and rubber products.

Oman's Industrial Strategy 2040 aims to elevate industrial value added, with manufacturing currently contributing approximately RO3.7 billion to GDP at constant prices in 2025 and RO869 million in the first quarter of 2026. The strategy targets a manufacturing contribution of RO5.44 billion by 2030 and RO10.702 billion by 2040. The compelling foreign investment interest in the sector, as evidenced by the RO2.87 billion in foreign direct investment in the manufacturing sector during the first quarter of 2026, further bolsters this growth narrative.

Despite the promising manufacturing figures, a deeper dive into individual industrial activities reveals divergent trends. For instance, refinery total petroleum refinery products declined by 5.1% to 108.8 million barrels, with diesel output falling 7.5% and regular petrol production dropping 4.7%.

However, the story is not entirely negative, as certain petrochemical products, such as benzene and paraxylene, showed significant gains. Benzene production increased by 12.9% to 97,100 metric tonnes, with exports rising by 16.6%, while paraxylene output advanced by 14% to 322,600 tonnes, with exports up by 6.1%. Despite these positives, polypropylene production faced a 29.4% decline to 124,600 tonnes, and its exports slipped by 26% to 97,000 tonnes.

Nonetheless, domestic polypropylene sales increased by 32.6% to 20,500 tonnes, reflecting a positive shift in this sub-sector.

The manufacturing sector's performance was also reflected in the earnings of listed industrial companies on the Muscat Stock Exchange, which rose to about RO86.5 million in the first half of 2026, up from RO57.2 million a year earlier. However, these results vary across companies, not representing the manufacturing sector as a whole.

The ministry's industrial policy emphasizes technology, local supply chains, higher value-added production, and workforce skills over merely expanding plant numbers. Officials are also actively working to broaden export markets, targeting destinations such as Iraq, East Africa, and Asian markets.