Arab News, Wednesday, Jan 11, 2023 | Jamadi Al Thani 18, 1444
Saudi construction sector continues growth with $6.7bn worth contracts in Q3 2022: Report
The construction sector in Saudi Arabia maintained its growth momentum in the
third quarter of 2022 with contracts worth SR25.2 billion ($6.7 billion) awarded
during the period, according to a report by the US Saudi Business Council.
The report suggested that multiple Vision
Realization Programs in the fields of tourism, housing, and infrastructure
development drove the sector’s growth in the Kingdom.
Despite a 6 percent year-on-year drop in the
number of contracts, the total value is on track to surpass the sector’s 2021
The value of awarded contracts in the first three
quarters rose 67 percent year on year to reach SR119.7 billion, the report
“The construction sector continues to perform at a
fast pace as a number of supporting developments have aided in its surge,” said
Albara’a Alwazir, director of economic research at the USSBC.
He added: “The improved macroeconomic environment
spurred by the Kingdom’s oil revenues coupled with ongoing non-oil sector
initiatives have helped propel project awards.”
The USSBC Contract Awards Index fell from 230 to
188 points in the third quarter for the first time since the third quarter of
2021. Nevertheless, the Kingdom’s construction activity is expected to rise in
the coming period since it still lands well above the 100-point threshold.
“The CAI’s performance during the first three
quarters of 2022 reveals the resurging health of the construction sector whereby
the value of construction projects under execution continue to soar,” the report
It further noted that the real estate sector grew
by SR11.7 billion quarter on quarter and by SR6.3 billion or 102 percent year on
“Through the first three quarters of 2022, real
estate gained the third highest value of awarded contracts by sector with SR23
billion or 19 percent of the total, after transportation and oil and gas,” it
According to the report, the transportation sector
witnessed a drop in awarded contracts during the third quarter yet maintained
its position as the second highest-performing sector in the third quarter of
The sector fell by SR18.9 billion compared to the
previous quarter but increased by SR780 million or 30 percent year on year.
“The 12 contracts awarded during the quarter were
dominated by NEOM’s four infrastructure and earthwork packages pertaining to The
Line’s high-speed rail link called The Spine,” the report added.
The water sector fell by SR3.3 billion or 51
percent year-on-year and by SR2.9 billion or 47 percent quarter-on-quarter.
The report pointed out that the Tabuk region
captured the largest share of awarded contracts worth SR10.2 billion or 42
percent of the total, driven by the real estate sector.
According to the report, the Riyadh region
witnessed a diversified mix of awarded contracts in the civil, transportation,
real estate, and healthcare sectors.
The Eastern Province contributed SR3.7 billion or
15 percent of the total contracts awarded in the Kingdom, largely backed by the
oil and gas sector.