01 January 2020

Saudi Arabia’s construction industry witnessed solid growth in the third quarter, buoyed by SR47.8 billion ($12.7 billion) worth of awarded contracts, according to a report by the US-Saudi Arabian Business Council (USSABC).

These awarded contracts during Q3 continued the trend seen in 2019 as oil and gas led all other sectors followed by the real estate segment. This quarter, however, witnessed the industrial sector amass the third highest value of awarded contracts after a relatively slow place during the two previous quarters.

These three sectors accounted for 80 per cent of all contract awards during the quarter. Other notable contributing sectors include urban development, water, and transportation, stated the council in its report.

With the level of construction activities continuing at an accelerated rate thus far in 2019, USSABC said the value of awarded contracts is on track to cross the SR200 billion mark for the first time since 2015.

Further bolstering this notion is the year-on-year (y-o-y) growth of contract awards during Q3’19 which jumped by 164 per cent compared to Q3’18.

Moreover, the first three quarters of 2019 witnessed a dramatic increase of SR87.2 billion or 117 per cent compared to the same period in 2018.

The USSABC Contract Awards Index (CAI) reached 236 points at the end of the third quarter.

According to USSABC, the energy industry accounted for SR16.4 billion or 34 per cent of the total value of awarded contracts. On a YTD (year-to-date) basis, the oil and gas sector has witnessed SR76.6 billion or 47 per cent of all awarded contracts by value.

The real estate sector garnered SR12.1 billion or 25 per cent of the total value of awarded contracts. Within the real estate sector, the mixed-use subsector generated the highest value of contracts with SR7.6 billion, followed by residential with SR4 billion and commercial with SR490 million.

Lastly, the industrial sector had SR9.6 billion or 20 per cent worth of awarded contracts.  

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