Construction contracts awarded in Saudi Arabia plunged in value by more than half in the first quarter of the year compared to the same period of 2015 as the kingdom continued to feel the effects of lower oil prices, a new report says.
Deals handed out in the first quarter amounted to SAR 27.9bn ($7.4bn) against SAR 57.3bn in the first three months of 2015, the sharpest drop since 2009, according to NCB Construction Contracts Index.
The total in the three months to 31 March was also 39 percent down on the final quarter of 2015.
Oil & gas accounted for 47 percent of the total value of awarded contracts, followed by hospitality (21 percent), and residential real estate (16 percent), the report said.
The Eastern province received the largest share with 51 percent of the total value followed by the Madinah region with a 13 percent share, and the Northern region with an 11 percent share.
Government spending on projects has been scaled back in line with the fall in oil revenue. Infrastructure spending has been especially hard hit though the government is still expected to invest heavily in other sectors such as housing.
Under the reforms detailed in Saudi Arabia’s recently announced National Transformation Plan, the government hopes to attract more private investment to make at least partly make up for its drop in spending.