Overview
The outlook for Oman’s manufacturing sector to 2040 is shaped by Vision 2040’s ambitious diversification agenda, global megatrends, and sector-specific dynamics. With a current GDP contribution of ~9% and a target of 15%+, the sector must achieve transformative growth while navigating structural challenges and competitive pressures from GCC peers.
Key Indicators
| Indicator | Current | 2040 Target |
|---|---|---|
| GDP Contribution | ~9% | 15%+ by 2040 |
| Aluminium Output | 390,000 tonnes/yr | 500,000+ tonnes/yr |
| Omanisation Rate | ~38% | 50%+ by 2040 |
| Non-Oil Industrial Exports | ~USD 8B | USD 20B+ by 2040 |
| Manufacturing Employment | ~90,000 | 240,000 by 2040 |
Scenario Analysis
Base Case (60% probability): Steady reform implementation drives gradual growth. The sector reaches 15%+ GDP contribution by 2038-2040. Investment of USD 12 billion in active and pipeline projects is largely deployed. Omanisation targets are substantially met. Key risks are managed but not eliminated.
Upside Case (25% probability): Accelerated reform, strong oil prices funding transition investments, and successful technology adoption propel the sector beyond targets. International investment exceeds expectations. Oman emerges as a GCC leader in select sub-segments.
Downside Case (15% probability): Reform fatigue, prolonged low oil prices, or regional instability slow progress. The sector achieves only 60-70 percent of Vision 2040 targets. Skills gaps and infrastructure delays compound.
Challenges
High energy input costs for non-subsidised operations, limited domestic supply chains, skill shortages in advanced manufacturing, competition from Saudi and UAE mega-factories, and reliance on imported raw materials.
Opportunities
Downstream aluminium value addition (extrusions, cables), food processing for regional export, pharmaceutical manufacturing (Oman Pharma), building materials for GCC mega-projects, and defence manufacturing under the IKTIFA programme.
Vision 2040 Targets
Raise manufacturing GDP share to 15 percent; double non-oil exports; create 150,000 new manufacturing jobs; achieve 50 percent Omanisation; establish Oman as a GCC advanced manufacturing hub.