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The value of contracts awarded in the Kingdom in Q2 2021 surged 134% year-on-year (YoY) to SAR 25.8 billion, according to latest data from US-Saudi Arabian Business Council.
Contracts increased by 34% compared to Q1 2021, with the value reaching SAR 19.2 billion.
The construction sector is witnessing a recovery contracts awarded this year, despite the continuing challenges caused by the pandemic, the report said.
The successive growth in the contracts over the past three quarters reflects the Kingdom's flexibility in its efforts to improve its physical and social infrastructure, the report added.
However, the construction sector remains fragile and faces a number of unfavorable factors, the most important of which is the high costs of building materials.
On the other hand, the sector benefits from a number of favorable factors, led by the recovery of oil prices and the gradual increase in output, which are a major driving force in the sector's return to pre-pandemic levels.
The demand for affordable housing, along with the government's goal of reaching 70% home ownership by 2030, will keep construction activities in the residential real estate sector robust in the medium to long term.
The report predicted that the recovery in the implementation of contracts awarded by the end of 2021 to 2022 would accelerate, as favorable factors supported the resumption of strong demand for cement in the near term.
Contracts Value in Saudi Arabia Since Q1 2019 |
||
Variation (%) |
Value (SAR bln) |
Quarter |
-- |
48.9 |
Q1 2019 |
+33% |
65.1 |
Q2 2019 |
(27%) |
47.8 |
Q3 2019 |
(26%) |
35.3 |
Q4 2019 |
+28% |
45.2 |
Q1 2020 |
(76%) |
11.0 |
Q2 2020 |
(85%) |
7.4 |
Q3 2020 |
(55%) |
16.0 |
Q4 2020 |
(58%) |
19.2 |
Q1 2021 |
+134% |
25.8 |
Q2 2021 |
The energy sector ranked first in terms of the value of contracts awarded during Q2 2021, at SAR 7.6 billion. It was followed by the petrochemicals sector at SAR 4.6 billion, and water sector at SAR 3.3 billion.
The value of contracts awarded in these three sectors accounted for 60% of the total value of contracts awarded during Q2 2021, as shown in the table below:
Value of Contracts Awarded in Q2 2021 By Sector (SAR bln) |
||
Sector |
Value (SAR bln) |
Share (%) |
Energy |
7.6 |
29 % |
Petrochemicals |
4.6 |
18 % |
Water |
3.3 |
13 % |
Transport |
3.2 |
12 % |
Others |
7.1 |
28 % |
Total |
25.8 |
100 % |
The Eastern Province came first in terms of the value of contracts awarded during Q2 2021 with SAR 11.7 billion, accounting for 45% of the total contracts, followed by Riyadh at SAR 6.7 billion, or 26% of the total value of the contracts. Makkah came third with SAR 3.8 billion worth of contracts, as shown in the following table:
Contracts Awarded by Region (SAR bln) |
||
Region |
Value (SAR bln) |
Share (%) |
Eastern Region |
11.7 |
45 % |
Riyadh |
6.7 |
26 % |
Makkah |
3.8 |
15 % |
Others |
3.6 |
14 % |
Total |
25.8 |
100 % |
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