USSABC: Saudi Arabia contracts fall 8% Y-o-Y to $12bn in Q1 2020
Downturn in the number of projects for the remainder of 2020 resulting from COVID-19 caused the plunge in the contract value
US-Saudi Arabian Business Council’s (USSABC) Contract Awards Index for the first quarter of 2020 shows an 8% y-o-y decline in the value of contracts awarded in the kingdom in Q1 2020 to reach $12bn (SAR45.2bn) due to the “downturn in the number of projects for the remainder of 2020 resulting from COVID-19 and the reduction in global oil prices”.
The latest report shows that the USSABC’s Contract Awards Index climbed to 216.6 points by the end of Q1 2020, despite having “briefly dipped” below the 200 point mark in January for the first time since May 2019.
The military sector secured 33% of the contracts valued at $4bn (SAR15bn); followed by oil & gas with 25% worth $3bn (SAR11.2bn); and petrochemicals with 18% corresponding to $2.2bn (SAR8.3bn), together these sectors accounted for approximately 76% of the total value of contracts.
Water, power, and real estate contracts accounted for 18% of the total value of the awarded contracts, while 6% were in other sectors.
According to the report, Eastern Province recorded the majority of contracts awarded covering 48% of the total contracts.Riyadh Province secured 37% of the contracts.
All oil, gas, and petrochemicals contracts were awarded in the Eastern Province, while Riyadh was dominated by the military sector as a result of the King Salman and King Faisal air base projects.
Q1 also saw a notable pickup in the value of petrochemicals contracts as Saudi Arabia continues to develop its downstream oil & gas capabilities in line with Vision 2030.