The construction sector in Saudi Arabia staged a strong rebound during 2019 as the government unveiled a series of reforms, with awarded contracts for numerous projects hitting their highest value in four years.
Approximately 197.1 billion Saudi riyals ($52.6 billion) in deals were awarded last year, the highest amount since 2015 and marking an impressive 95 percent increase over 2018, according to the US-Saudi Business Council.
Real estate firms emerged as a clear winner, bagging numerous deals throughout 2019, followed by those in the oil and gas sector.
As of the fourth quarter of 2019, the real estate sector captured approximately 12.1 billion riyals ($3.2 billion) in contracts, the majority of which (94 percent) are for the construction of residential projects.
The oil and gas sector recorded the second-highest value of awarded contracts during the same period, with 7.7 billion riyals ($2 billion) in deals.
The water sector landed the third spot, with approximately 6.3 billion riyals ($1.7 billion) in contracts.
According to the US-Saudi Business Council, the numerous initiatives and reforms in the kingdom fueled the growth in the construction sector last year.
“The kingdom’s drive to enhance both physical and social infrastructure capabilities through numerous vision realisation programmes was evident this past year,” the council said.
“These positive developments, which came to fruition in 2019, are expected to expand in the coming years to achieve the kingdom’s medium to long-term Vision 2030 targets,” it added.
Saudi Arabia has recently unveiled a series of reforms and initiatives in line with its economic diversification agenda and objective to open up the market to foreign investors.
Among the largest deal closed last year was the construction of more than 21,000 homes on a 1.41 million-square-metre site in Jeddah, which was awarded by the Ministry of Housing to Laseef Alfajar
The ministry also awarded last year the construction of a housing complex in Riyadh, which will consist of more than 5,000 townhouses and close to 600 apartments, as well as 14 mosques, eight schools and over a dozen gardens in Riyadh.
(Reporting by Cleofe Maceda; editing by Mily Chakrabarty)
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