According to a report by the US-Saudi Business Council, the total value of awarded contracts in Saudi Arabia for the third quarter of 2022 reached SR25.2 billion ($6.7 billion), with the construction sector being fuelled by a number of Vision Realization Programs relating to tourism and housing, as well as physical infrastructure developments.
Despite a 6% year-on-year drop in awarded contracts during Q3, the value of issued contracts thus far is on course to exceed 2021’s performance, according to the Council. The value of awarded contracts increased by 67% year-on-year in the first three quarters to SR119.7 billion ($31.9 billion).
The gradual decrease in construction material costs, combined with rising cement demand, has boosted the profitability of projects already in the execution stage, as well as developments on the horizon.
The real estate sector recovered from a weak second quarter by awarding 15 contracts for SR12.6 billion ($3.3 billion) during the third quarter
According to the Council, the real estate sector recovered from a weak second quarter by awarding 15 contracts for SR12.6 billion ($3.3 billion) during the third quarter. Mixed-use real estate led with one contract worth SR7.5 billion ($2 billion), while the residential real estate market saw eight contracts valued at SR4 billion ($1.1 billion), followed by commercial real estate with four contracts worth SR548 million ($146 million), and hospitality with two contracts worth SR544 million ($145 million).
The real estate sector recovered from a weak second quarter by awarding 15 contracts for SR12.6 billion ($3.3 billion) during the third quarter
In the transportation sector, the council reported a reduction in contract awards during Q3, but it remained the second-highest performer with a value of SR3.4 billion ($912 million). The 12 contract awards during the quarter were dominated by NEOM’s quartet of infrastructure and earthwork packages relating to The Line’s highspeed rail link known as ‘The Spine’.
With regard to water industry deals, the sector maintained its position as the third biggest awarder of contracts from the previous quarter, totaling SR3.2 billion ($863 million). SWCC and NWC distributed all four contracts equally, involving the building of reservoirs, pump stations, water transmission pipelines, and sewage networks.
When compared to the same period in 2021, the water sector increased by SR555 million ($148 million), or 5%.
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