Saudi Arabia awarded contracts worth SAR 25.2 bln in Q3 2022: US-Saudi Business Council

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The value of contracts awarded in the Kingdom during the third quarter of 2022 decreased by 6% year-on-year (YoY) to SAR 25.2 billion, according to a report issued by the US-Saudi Business Council.

It plunged by 48% compared to Q2 2022, during which the value of contracts amounted to SAR 48.6 billion.

The report also stated that despite the decline during Q3 2022, the value of contracts awarded so far is moving in the right direction to exceed the performance of 2021. Deals granted during the first three quarters of 2022 amounted to about SAR 119.7 billion, which constituted a YoY increase of 67%.

The Kingdom's improved macroeconomic outlook, supported by oil revenue coupled with ongoing non-oil sector initiatives, helped drive project awards, the report noted.

The council also pointed out that the construction sector continues to operate in an expansionary environment, as the performance of the contract awards index during the first three quarters of 2022 showed an upturn in the sector.

The value of under-implementation construction projects recorded a tremendous increase. Further, the gradual decline in the costs of building materials, along with the increase in demand for cement, helped boost the continuity of projects currently in the execution phase to development operations in the short-term.

It added that the awarding of major projects across several sectors will continue to support construction activity in the coming years, as it is expected to implement programs to achieve Vision 2030.

The real estate sector ranked first in terms of the value of contracts awarded during Q3 2022 at SAR 12.6 billion. The transport sector followed at SAR 3.4 billion, and then the water sector at SAR 3.2 billion.

The value of contracts awarded in these three sectors accounted for 77% of the total value of contracts awarded during the third quarter of 2022.

According to the report, NEOM has played a key role in boosting construction contracts, awarding deals worth SAR 23.7 billion across a number of sectors. Projects such as THE LINE, Saudi Rail Network and THE SPINE have contributed to NEOM's biggest developments to date.

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

Makkah came first in terms of the value of contracts awarded during the quarter by nearly SAR 10.2 billion, which constitutes 40% of total contracts, followed by Tabuk at SAR 4.5 billion, or 18% of the total value of contracts. Eastern Province came third at SAR 3.7 billion, as shown in the following table: