USSABC: Saudi Arabia contracts spike 34% YoY to $9.4bn in Q4 19
US-Saudi Arabian Business Council says $52.6bn worth contracts were awarded in 2019 surging 95% over 2018
Saudi Arabia continued its contracts winning streak in the fourth quarter of 2019, with the total value of awarded contracts reaching $9.4bn (SAR35.3bn), surging 34% year-on-year compared to Q4 2018, as construction activities intensify in the kingdom.
According to the US-Saudi Arabian Business Council’s (USSABC) Contract Awards Index: Fourth Quarter of 2019 report, the value of awarded contracts in Q4 2019 slumped by 26% compared to Q3 to reach $3.3bn (SAR12.5bn).
However, 2019 ended as the highest grossing year in terms of value of contracts awarded since 2015.
The robust movement in construction activities in 2019 resulted in approximately $52.6bn (SAR197.1bn) in awarded contracts, marking a 95% surge over 2018.
The report indicated that Saudi Arabia’s initiative to enhance both physical and social infrastructure capabilities through numerous Vision Realisation Programs (VRPs) aligned with the kingdom’s Vision 2030, reflected in the 2019 performance.
Saudi Arabia’s real estate sector took the top spot in Q4 2019, bagging 34% of the contracts recording $3.2bn (SAR12.1bn), leaving oil and gas sector — that led the previous three sectors — behind with 22% of the total contracts accounting to $2bn (SAR7.7bn).
Meanwhile, the water sector jumped to third position with $1.7bn (SAR6.3bn) worth of contract awards, followed by power, petrochemicals, transportation, and industrial sectors.
Real estate contracts stood ahead of oil and gas for the first time as the Ministry of Housing broke ground on several large scale housing projects.
The USSABC Contracts Awards Index (CAI) reached 210.27 points at the end of Q4 2019, marking the seventh consecutive month the CAI has remained above the 200 point mark despite a slide during Q3 and Q4.
The CAI’s 210.27 points indicated a 11% decrease quarter-on-quarter compared to Q3, but surged by 70% y-o-y compared to 2018. According to the report, the CAI will continue its streak above 200 points through 2020 on the back of megaprojects in the kingdom.
In Q4 2019, the majority of contracts accounting to 41% were awarded in Makkah, followed by 26% in Riyadh, and 21% in the Eastern Province, with Makkah having outpaced Riyadh and the Eastern Province for the first time in 2019.