According to a US Saudi Business Council index that tracks construction spending, the value of construction contracts awarded in Saudi Arabia reached SR46 billion in the first quarter of 2022, indicating a strong start to the year.
The USSBC Contract Awards Index increased to 212.31 points in the first three months of the year, signifying that construction activity in the Kingdom is expected to increase in the coming period.
“The growth of the Kingdom’s economy, which witnessed sizeable increases to GDP (gross domestic product) due to global oil market dynamics and steady strengthening of its non-oil GDP, will keep the construction sector active” said Albara’a Alwazir, Director of Economic Research at the US-Saudi Business Council.
Oil and gas was the leading sector in awarded contracts
Oil and gas was the leading sector in awarded contracts once again, accounting for a third of the total amount of SR15.1 billion in the first quarter of this year. Furthermore, real estate experienced a 20% quarterly increase and a 126% yearly increase in the first four months of this year.
Real estate experienced a 20% quarterly increase
In Q1 2022, the mixed-use market accounted for SR4 billion, 42% of all real estate. Commercial real estate accounted for SR3.2 billion, or 34% of total real estate, while residential real estate accounted for SR1.4 billion, or 14%, and hospitality accounted for SR990 million, or 10%.
According to the Business Council report, Saudi Arabia’s construction activity saw a strong start in 2022 and is expected to continue positively throughout the year.
“A pickup in capital expenditure is anticipated for the remainder of 2022, as numerous state social and physical infrastructure projects that were earmarked in the budget will commence,” stated the report.