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The construction industry of Saudi Arabia displayed solid growth in the third quarter, with contract awards during Q3 2019 growing 164% versus the same quarter a year ago, according to a report by the US-Saudi Arabian Business Council (USSABC).
The value of contracts awarded in the third quarter of 2019 increased to SAR 47.8 billion, bringing the total awards for the January-September period to SAR 87.2 billion, up 117% year-on-year, the report showed.
The contracts awarded during the latest quarter continued the trend seen thus far in 2019 as the oil and gas sector led, followed by the real estate sector. This period witnessed the industrial sector amass the third-highest value of awarded contracts after a relatively slow pace during the previous two quarters. The three sectors together accounted for 80% of all contract awards during the quarter, the report explained.
The oil and gas industry generated SAR 16.4 billion or 34% of the total value of awarded contracts. The real estate sector garnered SAR 12.1 billion or 25% of the total value of awarded contracts. Finally, the industrial sector recorded SAR 9.6 billion or 20% worth of awarded contracts. Other notable contributing sectors included urban development, water, and transportation.
The biggest contracts awarded during the period include the SAR 6.2 billion award by Shomoul Holding to Nesma & Partners for a new mall to be built as part of The Avenues Riyadh development, a SAR 5.6 billion contract by Saudi Aramco for package nine of a new gas plant at Tanajib to Tecnicas Reunidas, and a SAR 4.8 billion deal to Samsung Engineering to build a new tyre plant in Jubail from the kingdom’s National Tire Corporation.
With construction activities continuing at an accelerated pace thus far in 2019, USSABC said the value of awarded contracts is on track to cross the SAR 200 billion mark for the first time since 2015.
Cavendish Maxwell is the MENA region’s leading firm of property consultants and chartered surveyors. If you are looking for professional real estate consultation or advice on property related matters, please view our services.
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