Saudi Arabia awarded SAR 71.5 bln contracts in Q4 2022: US-Saudi Business Council

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The value of contracts awarded in Saudi Arabia rose by 2% year-on-year (YoY) to SAR 71.5 billion in Q4 2022, according to a report issued by the US-Saudi Business Council.

The value of contracts surged 184% from SAR 25.2 billion in Q3 2022.

The Q4 2022 growth increased the total value of contracts awarded in 2022 to reach SAR 192.4 billion, up 35% YoY.

The construction sector continued to climb in 2022, as the value of contracts awarded returned to pre-pandemic levels.

The report pointed out that the growth in construction spending in the Kingdom was partially indicated by the government's increase in capital expenditures, which exceeded the budgeted value for 2022 by SAR 92 billion ($24.5 billion), an increase of 56% to SAR 143 billion ($38.3 billion). Meanwhile, capital expenditure witnessed an increase of SAR 26 billion ($7 billion), or 22% YoY.

The real estate sector ranked first in terms of the value of contracts awarded during Q4 2022 at SAR 38.9 billion. The energy sector followed at SAR 16.4 billion with the transport sector at SAR 6 billion.

The value of contracts awarded in these three sectors accounted for 85% of the total value of contracts awarded in Q4 2022.

The boom in the real estate sector was supported by the residential real estate market, the report noted, adding that the recovery in energy sector contracts was primarily attributable to a major contract signed by ACWA Power for Shuaibah II solar PV plant, which is the largest contract awarded in the energy sector last year.

NEOM is the highest contract awarding entity in the transport sector due to the continued development of its transport network, including tunneling, dredging and excavation.

Red Sea Global Co. and Qiddiya Investment Co. contributed several large contracts during the quarter.

The following table shows the value of contracts awarded by sector during the fourth quarter of 2022:

Tabuk came first in terms of the value of contracts awarded during the fourth quarter by nearly SAR 27.4 billion, which constitutes 38% of total contracts, followed by Riyadh at SAR 13.8 billion, or 19% of the total value of contracts. Makkah came third at SAR 12.7 billion, as shown in the following table: