01 June 2016

The total value of construction contracts awarded in Saudi Arabia hit SR27.9 billion ($7.4 billion) during the first quarter, down 51 per cent over SR57.3 billion ($15.2 billion) for the same period last year, said a report by NCB, the country’s leading bank.

The slow pace of activities witnessed toward the end of 2015 has continued further into the first quarter of 2016, with the contract value down 39 per cent over the previous quarter, stated NCB in its construction contracts index.

This represents a substantial drop and is indicative of increasingly tough economic conditions as the construction industry comes to terms with the severe impact of ongoing low oil prices. It is the sharpest quarterly decline in the value of awarded contracts since 2009, said the Saudi lender in its report.

While many of the projects awarded are likely to proceed, they may be scaled down or their execution  rescheduled over an extended period, it added.

However, the government will continue to spend on social and physical infrastructure projects, but the level of spending will inevitably be rationalised over the medium term, stated the
NCB report.

The report indicated that the main contributing sectors in Q1 were oil and gas, which has accounted for 47 per cent of the total value of awarded contracts worth SR13 billion ($3.46 billion), followed by hospitality at SR5.9 billion (21 per cent), and residential real estate SR4.6 billion (16 per cent).

According to NCB, the geographical analysis of contracts shows that the Eastern Province received the largest share with 51 per cent of the total value of awards.

• KAFD ownership to go to state wealth fund
• Saudi contracts value plunges 51pc in Q1
• SBG secures $667m loan
• MAF malls to rise next year
• Jeddah power plant comes online
• Update

Tags

Green Buildings Railway Construction Lighting Corrosion Technology Quarrying Britain & the Middle East Forklifts & Telehandlers Legally Bound Just Out Regional News Saudi Focus UAE Focus Events Diary of events Contractors Real Estate Interiors Tenders Manufacturers & Procurement Editorial Calendar - 2016

Gulf Construction is the undisputed leading trade journal for the building and construction industries of Saudi Arabia and the other Gulf states. The magazine provides editorial coverage on a wide range of topics which are of interest to industry professionals. In addition, regular features highlight technological developments within specific industry fields. Launched 40 years ago, the magazine has established an enviable reputation as an authoritative, respected journal with unmatched coverage of the Gulf region. Gulf Construction is essential reading for anyone with a serious interest in the region’s building and construction industry.