RIYADH: Saudi Arabia’s construction sector saw the value of awarded contracts increase to SR192.4 billion ($51.3 billion) in 2022 — a 35 percent rise on the previous year, a leading industry body has revealed.
According to the US-Saudi Business Council, contract values during the fourth quarter of 2022 reached SR71.5 million, accounting for 37 percent of the total contracts awarded last year.
The USSBC said the overall deals struck between October and December were the highest since the first quarter of 2015, when contract values touched SR88.1 billion.
“The surge in contract awards continues unabated on the back of a growing economy that was fueled by significant oil revenues and the acceleration of giga-projects following the COVID-19 slowdown,” said Albara’a Alwazir, director of economic research at the USSBC.
The USSBC’s Contract Awards Index, a proprietary tracker of Saudi Arabia’s construction pipeline, stayed at about the 200-point mark in 11 out of 12 months of 2022, overcoming a slowdown seen during the second half of 2021.
The index advanced 28 percent in the fourth quarter of 2022 compared to the earlier three months, in what was also an annual growth rate of 16 percent.
Moreover, the index touched 257.07 points in October, 256.80 points in November and 242.71 points in December last year.
Real estate topped the sectoral list as it secured SR38.9 billion from 33 contracts in the fourth quarter of 2022, cementing its position as the highest-grossing market in 2022.
The upsurge was fueled by the residential real estate market, which grew by SR25.3 billion in the fourth quarter of 2022 compared to the previous three months. On an annual basis, the market grew by SR27.6 billion.
Likewise, the power sector rebounded between October and December last year, with 20 contracts worth SR16.4 billion.
The resurgence was mainly attributed to ACWA Power’s Shuaibah 2 solar photovoltaic power plant project, which emerged as the largest contract award in the sector in 2022.
The value of contracts awarded in the power industry were the highest on a quarterly basis since the second quarter of 2014, when the sector garnered SR16.6 billion.
On the clients’ front, NEOM was the most active awarder of contracts as it continued to develop its transportation network, including tunneling, dredging and earthworks.
The report further disclosed that Red Sea Global and Qiddiya Investment Co. also chipped in several sizable contracts during the quarter.